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13 April 2016
Manhattan U.S. Attorney and FBI Assistant Director Announce Insider Trading Charges Against Analyst at Investment FundRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced today that JOHN AFRIYIE, a former analyst at a Manhattan-based private investment fund (the “Fund”), was arrested this morning and charged with insider trading. AFRIYIE made approximately $1.5 million in profits in connection with options trading based on material nonpublic information he misappropriated from the Fund about an impending acquisition of a publicly traded company. AFRIYIE was presented today in Manhattan federal court before United States Magistrate Judge James L. Cott.
Manhattan U.S. Attorney Preet Bharara said: “In February of this year, John Afriyie made a quick $1.5 million profit by trading in options of ADT stock. His profits were not the result of trading acumen, diligent research, or blind luck, but rather the alleged spoils of criminal insider trading. Afriyie allegedly traded on material nonpublic information he had obtained about a pending acquisition of ADT that had not yet been made public. Afriyie’s attempts to keep his alleged criminal insider trading secret by trading in his mother’s name failed, and thanks to the efforts of the FBI and the SEC, he will now answer to federal securities fraud charges.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Afriyie allegedly disregarded insider trading laws to enrich himself. The FBI is committed to working with our partners to pursue those who commit these crimes and undermine the public's confidence in the financial markets.”
According to the Complaint filed today Manhattan federal court:[1]
In January 2016, Apollo Investment Management LLC (“Apollo”) contacted the Fund to discuss whether the Fund would provide debt financing for Apollo’s potential acquisition of ADT Corporation (“ADT”) in an all-cash transaction. The Fund entered into a non-disclosure agreement with Apollo and was granted access to an electronic data room for the ADT transaction. As an investment analyst at the Fund, AFRIYIE had access to the Fund’s network server, which maintained, among other things, electronic shared directory file folders containing material nonpublic information, including information about Apollo’s acquisition of ADT.
In violation of the Fund’s policies and in breach of his duties to the Fund and its clients, AFRIYIE accessed material nonpublic information about Apollo’s pending acquisition of ADT in an electronic shared drive folder on the Fund’s network server. In approximately 28 separate transactions between January 28, 2016, and February 12, 2016, AFRIYIE purchased approximately 2,279 ADT call options for a total of $24,254.02 before the public announcement of that transaction. AFRIYIE purchased the ADT call options through a brokerage account in the name of AFRIYIE’s mother, which AFRIYIE controlled. AFRIYIE did not reveal his affiliation with the Fund in the account opening documents for the brokerage account or in his communications with the brokerage firm. Nor did AFRIYE reveal his trades or the existence of the brokerage account to the Fund.
The public announcement of Apollo’s acquisition of ADT in February 2016 caused ADT shares to increase in value from $29.20 per share on the day AFRIYIE began purchasing ADT options to $39.64 per share, resulting in a corresponding increase in the value of the call options AFRIYIE had purchased. As a result of the insider trading alleged in the Complaint, AFRIYIE earned at least $1.53 million in realized and unrealized profits.
* * *
AFRIYIE is charged with one count of securities fraud, which carries a maximum sentence of 20 years in prison and a maximum fine of $5 million, or twice the gross gain or loss from the offense. The statutory maximum sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and thanked the SEC, which has filed civil charges in a separate action. He added that the FBI’s investigation is ongoing.
The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.
The allegations contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation.
Leader of Conspiracy to Rob an Owings Mills Jewelry Store Sentenced to 30 Years in PrisonRead the Press Release
Baltimore, Maryland – U.S. District Judge J. Frederick Motz sentenced Stanislav “Steven” Yelizarov, age 26, of Pikesville, Maryland, today to 30 years in prison, followed by five years of supervised release, for a robbery conspiracy, kidnapping, and brandishing a firearm in relation to a crime of violence, in connection with the robbery of a jewelry store, including a carjacking and kidnapping. Judge Motz also entered an order requiring Yelizarov to pay restitution of $500,000.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; and Baltimore County State’s Attorney Scott Shellenberger.
According to his plea agreement, Yelizarov was the leader of a conspiracy to rob an Owings Mills jewelry store, and was also the leader of an armed home invasion robbery designed to obtain firearms, which were subsequently used in the robbery of the jewelry store.
Specifically, on July 22, 2012, Yelizarov, his brother MaratYelizarov, Aleksy Sosonko, and Grigory Zilberman robbed a home in Reisterstown, Maryland. Zilberman was familiar with the layout of the home, and knew that the residents owned firearms, having been there as a guest on a number of occasions. Zilberman had handled and fired some of the weapons. After conducting surveillance of the home for several days prior to the robbery, at 2:30 a.m. on July 22, 2012, S. Yelizarov, who was armed with a handgun, Sosonko, M. Yelizarov, and Zilberman traveled to the home in Reisterstown. Dressed all in black and wearing ski masks and latex gloves, the co-conspirators entered the home through the unlocked garage door. Sosonko, M. Yelizarov, and Zilberman grabbed long guns from the residence and carried them throughout the home. A resident of the home was asleep when the four robbers entered his bedroom and woke him up, pointing guns at him and shining flashlights in his eyes. S. Yelizarov beat the resident when he tried to resist while M. Yelizarov tied up the resident with a belt and a cord. For approximately one hour the robbers ransacked the home looking for firearms and other valuables. After the robbers left, the resident was able to free himself and call police. The resident was taken to the hospital for treatment of his injuries. Among the items stolen from the house were 10 long guns (rifles and shotguns), a crossbow, a laptop computer, and jewelry. Numerous electronic devices including computers and televisions were destroyed during the robbery. The value of the items stolen was approximately $10,000.
In the fall of 2012, Yelizarov devised a plan to commit an armed robbery of a jewelry store, known to be owned and operated by members of the Russian community of Northwest Baltimore. Yelizarov was the leader of the conspiracy and had final decision making authority over the execution of the scheme. Yelizarov recruited Zilberman, Sosonko, Igor Yasinov, Peter Magnis, M. Yelizarov, Sorhib Omonov, and others to participate in the robbery. In preparation for the robbery, on December 25, 2012, S. Yelizarov, Yasinov, and others committed a burglary of a residence in Baltimore, during which they stole a shotgun and semiautomatic handgun. The handgun was used in the robbery of the jewelry store on January 16, 2013. Prior to the robbery, the conspirators gathered intelligence, including conducting surveillance. S. Yelizarov purchased and attached a GPS device to the car of an employee of the jewelry store in order to learn the employee’s travel routine and habits. Zilberman also exploited his friendship with the employee to obtain information about the operation of the jewelry store and the habits of the employee. According to S. Yelizarov’s plea agreement, on January 15, 2013, Zilberman enticed the employee to visit his home, in order to alert the other co-conspirators of the employee’s whereabouts. While the employee was at Zilberman’s home, the conspirators met at Yelizarov’s residence to prepare for the kidnapping and robbery, including preparing the firearms and donning masks and gloves. Early in the morning on January 16, 2013, M. Yelizarov and Omonov followed the employee from Zilberman’s home and notified the other conspirators of the employee’s location so they could follow the employee. S. Yelizarov, Sosonko, Yasinov, and Magnis driving in a rental car obtained by Yasinov, used a law enforcement-type light bar and a loudspeaker to impersonate a police officer and pull over the employee. Brandishing firearms which were supplied by S. Yelizarov, the conspirators removed the employee from his car, bound and blindfolded the employee, put him into the trunk of his own car, and drove him to a predetermined location.
According to the plea agreement, once at the location, S. Yelizarov and the co-conspirators continued to brandish firearms and threatened to kill the employee’s family if he did not comply with their demands or if he reported the incident to police. The employee complied and at approximately 3:52 a.m., S. Yelizarov and Sosonko drove the employee’s vehicle from the remote location to the jewelry store, while Yasinov and Magnis stayed with the employee, holding him bound and blindfolded at gunpoint. M. Yelizarov and Omonov were stationed near the jewelry store to act as “look-outs.” S. Yelizarov and Sosonko entered the store and stole jewelry, stones, and watches, valued at about $500,000, then drove back to the remote location. The employee was placed back into the trunk of his car and driven to another location, where he was left. The employee was able to kick his way out of the trunk through the back seat of his car.
On January 18, 2013, S. Yelizarov sold a portion of the stolen jewelry for approximately $29,000 to an FBI informant. On January 19, 2013, S. Yelizarov traveled to Brooklyn, New York to sell some of the jewelry and stones taken during the robbery, receiving over $100,000. On January 21, 2013, he returned to Maryland and divided the cash proceeds among the members of the conspiracy and others. S. Yelizarov determined how much each participant received based on his perception of the risk and the conduct of each participant.
On January 25, 2013, S. Yelizarov was arrested in Buffalo, New York, on federal misuse of passport charges. From January 25 through February 2, 2013, S. Yelizarov placed calls directing his brother, M. Yelizarov, and others, to remove from his residence and dispose of evidence related to the jewelry store robbery, including cash from the sale of the jewelry, firearms used during the conspiracy, the law enforcement light bar, the GPS device, a laptop computer, and other evidence of the crimes.
Grigoriy (Greg) Zilberman, age 25, and Aleksey Sosonko, age 35, both of Owings Mills, Maryland; Igor Yasinov, age 26, of Baltimore; and Marat Yelizarov, age 27, of Pikesville, previously pleaded guilty to their roles in the robbery conspiracy and are awaiting sentencing. Peter Aleksandrov Magnis, age 28, of Hydes, Maryland, and Sorhib Omonov, age 27, of Baltimore, also pleaded guilty and were sentenced to seven years in prison and four years in prison, respectively.
United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, and Baltimore County State’s Attorney’s Office for their work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Paul E. Budlow and Aaron S. J. Zelinsky, who are prosecuting the case.
Las Vegas Man Indicted for Defrauding 39 Persons in Investment Fraud SchemeRead the Press Release
LAS VEGAS, Nev. – A man who convinced persons to invest money with him by falsely representing himself to be a successful securities trader and investor, was indicted by the federal grand jury today for stealing almost $2 million from his victims, announced U.S. Attorney Daniel G. Bogden for the District of Nevada.
“Social media platforms are increasingly being used by persons with criminal intentions,” said U.S. Attorney Bogden. “Be very cautious and investigate the background of persons who request your money with promises to invest it.”
Sean Christopher Sladek, 39, most recently of Henderson, Nev., and Liberty, Texas, is charged with two counts of wire fraud, two counts of money laundering, and criminal forfeiture. Sladek is scheduled to appear before U.S. Magistrate Judge Nancy Koppe on April 21, 2016, for an arraignment and plea. Sladek has been in federal custody since March 31, when he was arrested by the FBI at McCarran Airport.
According to the indictment, from about January 2011 to March 2016, Sladek allegedly solicited persons, including some he met through social media sites, such as online dating platforms Tinder and Bumble, and through Craigslist, for investment funds. Sladek falsely told the victims and potential victims that he was a successful securities trader and investor, and that he would invest any monies they gave him to earn positive returns on their investments. In fact, Sladek was not a successful investor or securities trader, and used the funds he received from the victims for gambling, personal expenses, and to enrich himself. When the victim investors complained to Sladek about non-payment of investment returns, Sladek gave numerous false excuses and reasons for why they had not been paid. The indictment states that on May 10, 2013, and September 12, 2014, Sladek received $100,000 from one victim in California and $40,000 from another victim in South Carolina, respectively, and, within one day of receiving those funds, he deposited cashier’s checks for almost the same amounts into two casino accounts in Las Vegas. Sladek did not pay investment returns to any known victim, and wrongfully obtained approximately $1.7 million from about 39 known victims.
If convicted, Sladek faces a maximum of 20 years in prison on each wire fraud count and up to 10 years in prison on each money laundering count, as well as fines of up to $250,000 on each count.
The case is being investigated by the FBI, and prosecuted by Assistant U.S. Attorney Jiamin Chen.
If you believe you are a victim of this offense, please contact your local FBI field office.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. For more information about the task force visit: www.stopfraud.com.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Kansas Business Owner Convicted on Federal Tax ChargesRead the Press Release
WASHINGTON – A Leawood, Kansas, business owner was convicted today of tax fraud following a month-long jury trial, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Barry R. Grissom of the District of Kansas.
The jury found Kathleen Stegman, 58, guilty of four counts of tax evasion relating to her evasion of corporate income taxes for the years 2008 and 2009 and individual income taxes for the years 2007 and 2008. Stegman and her husband, Christopher Smith, 51, were both acquitted on the charge of conspiracy to defraud the United States and Stegman was acquitted on one count of tax evasion.
Stegman owned Midwest Medical Aesthetics Center in Leawood, which provided aesthetic services including microdermabrasion, laser hair removal and anti-aging procedures and products. Smith owned Encompass Construction Group in Independence, Missouri.
“Today’s verdict is a reminder to business owners that they cannot use their companies as their personal piggy banks,” said Acting Attorney General Ciraolo. “All taxpayers must file true and accurate returns with the IRS to report their income and expenses. Those that fail to do so face significant consequences, including criminal prosecution, prison and monetary penalties.”
According to the evidence at trial, Stegman under-reported her company’s gross receipts and overstated her company’s expenses on the corporate tax returns filed with the Internal Revenue Service (IRS). Stegman also diverted income from the company for her personal use and failed to report the income on her tax returns. The government also presented evidence that Stegman and Smith agreed to fabricate a repairs and maintenance contract between Smith and Midwest Medical in order to increase the company’s business deductions and divert money from the company to their personal use. In December 2010, Stegman wrote a check in the amount of $50,575 to Encompass Construction, which was drawn on Midwest Medical’s bank account. Smith used the money to buy gold coins that were shipped to Stegman’s business address in Leawood. On Midwest Medical’s 2010 corporate tax return, Stegman fraudulently deducted this payment as a business expense for repairs and maintenance.
“Today’s verdict is an important victory for America’s taxpayers who play by the rules and have no tolerance for those who make up their own rules,” said Special Agent in Charge Karl Stiften of IRS-Criminal Investigation. “There is no such thing as free money and there are no awards or incentives for creativity when it comes to crime.”
Stegman faces a statutory maximum sentence of five years in prison and a $250,000 fine on each count of tax evasion. A sentencing date has not yet been set.
Assistant Attorney General Ciraolo and U.S. Attorney Grissom thanked special agents of IRS Criminal Investigation, who investigated the case and Trial Attorneys Ryan R. Raybould and John T. Mulcahy from the Tax Division and Assistant U.S. Attorney Jabari B. Wamble of the District of Kansas, who prosecuted the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
Justice Department and Federal Trade Commission Officials Meet with Officials Responsible for Chinese Anti-Monopoly AgenciesRead the Press Release
Assistant Attorney General Bill Baer of the U.S. Department of Justice’s Antitrust Division and Federal Trade Commission Chairwoman Edith Ramirez participated in high level bi-lateral meetings with officials responsible for China’s three anti-monopoly agencies – National Development and Reform Commission (NDRC) Vice Minister Hu Zucai, Ministry of Commerce (MOFCOM) Assistant Minister Tong Daochi and State Administration for Industry and Commerce (SAIC) Vice Minister Wang Jiangping.
The meetings took place this morning in Washington, D.C., and allowed the participating agencies to exchange information and views on antitrust developments and priorities. In addition, the agencies discussed the role of competition enforcement and advocacy in promoting innovation. The meetings will continue this afternoon and tomorrow with separate meetings between U.S. antitrust enforcers and each of the three Chinese agencies.
These are the third joint, high-level meetings between the agencies since the Justice Department and the FTC signed an antitrust memorandum of understanding with the Chinese antitrust agencies on July 27, 2011. The MOU is designed to promote communication and cooperation between U.S. and Chinese antitrust enforcement agencies and provides for periodic high-level consultations.
Justice Department Reminds Taxpayers That Willful Failure to Comply with Our Nation’s Tax Laws is a CrimeRead the Press Release
Highlights Focus on Traditional Tax Enforcement
With the annual tax return filing deadline approaching, the Justice Department’s Tax Division reminds U.S. taxpayers that willful failure to comply with our nation’s tax laws is a crime. Whether they willfully fail to file returns, file false returns, or evade tax due, taxpayers who cheat will face serious consequences including prison and monetary sanctions.
“Our nation depends on all taxpayers, regardless of age, profession or economic status, to file accurate returns and promptly pay their taxes,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Individuals and businesses that willfully fail to comply with their legal responsibilities harm not only the U.S. Treasury, but also all Americans who are paying their fair share. The department is committed to continuing to aggressively prosecute those individuals who seek to circumvent U.S. tax laws.”
“Paying taxes is not a choice but a responsibility,” said Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI). “IRS-Criminal Investigation works with our partners at the Department of Justice to enforce our nation’s tax laws and ensure that we are all playing by the same rules. IRS-CI special agents are specifically trained to investigate complex financial fraud, and bring their considerable skill and experience to these investigations. Those who think they can evade our efforts will find they are terribly mistaken.”
Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country.
Failure to File Tax Returns and Failure to Pay Taxes
- In April 2016, James Redding, the president of an interior construction business in the District of Columbia and Maryland, was sentenced to two years in prison for failing to pay over $1.4 million in income and employment taxes. Redding also filed false tax returns on behalf of himself and his wife and on behalf of his business. Instead of paying his company’s employment taxes, Redding used company funds to pay the company’s creditors and for the benefit of himself and his family members. This case was prosecuted by the U.S. Attorney’s Office for the District of Columbia.
- In September 2015, Thomas Tilley, a businessman in North Carolina, was sentenced to 32 months in prison and ordered to pay more than $7 million in restitution to the IRS for a decades-long scheme, which included his failure to file returns despite earning a substantial income, sending fraudulent financial instruments to the IRS in an effort to discharge his tax debt, using nominee entities and sham trusts to purchase and sell real estate and placing false liens on his properties to prevent the IRS from collecting his taxes. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Middle District of North Carolina.
- In June 2015, Ronald Martin, the former owner and operator of a New Hampshire construction company, pleaded guilty to three counts of tax evasion. Martin failed to file corporate or individual tax returns despite the fact that his company generated more than $1 million in gross revenue over a three year period. Martin also attempted to conceal the business revenue from the IRS by directing that payments be made in his nephew’s name, depositing only a fraction of the business receipts into the business’s bank accounts, and diverting a significant portion to his personal use. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of New Hampshire.
Filing False Tax Returns
- In March 2016, Lorenzo Shane Stewart, the owner of an excavation and construction business in Illinois, was sentenced to 30 months in prison following his guilty plea to tax evasion. Stewart failed to report his business income on his tax returns and failed to pay more than $1.12 million in income taxes. This case was prosecuted by the U.S. Attorney’s Office for the Central District of Illinois.
- In February 2016, Avan Nguyen, the owner of a wholesale beauty supply business in Texas, was sentenced to three years in prison, ordered to forfeit $1.1 million, and ordered to pay restitution to the IRS for aiding and assisting in the filing of a false tax return. Nguyen caused a tax return to be filed for his company that omitted nearly $5 million of income. This case was prosecuted by the U.S. Attorney’s Office for the Northern District of Texas.
- In November 2015, Tammy Denise Westbrooks, a Texas resident and manager of a tax return preparation business in Charlotte, North Carolina, was convicted for filing false tax returns and attempting to obstruct the IRS. Westbrooks underreported her net business profit by inflating her business expenses, paid workers in cash, and failed to file the required Forms W-2 and 1099 to report workers’ compensation to the government. This case was prosecuted by the Tax Division.
Concealing Income and Assets Through Nominee Entities and Offshore Bank Accounts
- In April 2016, Michael D. Brandner, an Alaska plastic surgeon, was sentenced to four years in prison for wire fraud and tax evasion. After his wife filed for divorce, Brandner collected millions of dollars in marital assets and drove from Tacoma, Washington, to Costa Rica, where he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box. He then traveled to Panama where he opened an account under the name of a sham corporation and in 2008, deposited $4.6 million into the account. Brandner concealed both the existence of the accounts and the interest income earned on those accounts from the court in the divorce proceedings and from the IRS. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of Alaska.
- In January 2016, Gregory Claxton, a Michigan certified public accountant and tax return preparer, pleaded guilty to tax evasion after he concealed assets from the IRS to avoid paying nearly $150,000 in taxes. Claxton admitted he deposited the proceeds of his business into bank accounts in his wife’s name to avoid the appearance that he had the ability to pay his income taxes. Claxton also admitted that, just two days prior to meeting with the IRS to discuss his ability to pay his outstanding tax bill, he transferred title to his house to a trust in his wife’s name in an effort to thwart IRS collection efforts. This case was prosecuted by the U.S. Attorney’s Office for the Western District of Michigan.
- In October 2015, Terry Myr, a Michigan mechanic, who specialized in repairing classic and rare cars, including Ferraris, was sentenced to two years in prison for tax evasion and failure to file tax returns. Myr attempted to prevent the IRS from collecting nearly $200,000 in taxes by transferring property to third parties, using nominee companies and dealing in cash. Myr also failed to file tax returns for multiple years to report his income to the government. This case was prosecuted by the Tax Division.
Using Businesses to Pay Personal Expenses
- In March 2016, Faiger Blackwell, the owner of a North Carolina funeral home and other businesses, was sentenced to two years in prison for tax fraud and bankruptcy fraud. Blackwell filed for bankruptcy after accumulating more than $300,000 in federal taxes and more than $1 million in other debts. During the bankruptcy proceedings, Blackwell concealed rental income and used the money to pay for business and personal expenses. After the IRS levied one of Blackwell’s business bank accounts, he set up another company and corresponding bank accounts to divert and conceal funds and circumvent the levy. Blackwell used these funds to pay business and personal expenses, including paying for a cruise. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Middle District of North Carolina.
- In September 2015, Sheila Mohammed, a doctor in Florida, was sentenced to one year in prison and ordered to pay restitution for filing false income tax returns for herself and her medical practice. Mohammed used the more than one million dollars she failed to disclose to the IRS to purchase vehicles and properties in Florida, Hawaii and New Mexico. This case was prosecuted by the U.S. Attorney’s Office for the Northern District of Florida.
Obstructing IRS Efforts to Assess and Collect Taxes
- In January 2016, James S. Faller II, a former private investigator and legal consultant in Kentucky, was sentenced to serve three years in prison for obstructing the IRS, tax evasion and failing to file tax returns. Faller failed to file tax returns to report his income, which ranged from $126,000 to $289,000 per year, and attempted to hide his income from the IRS by having his income paid to a nominee and using nominee bank accounts. Faller also signed and submitted a false Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to an IRS revenue officer as part of the IRS’s efforts to collect his unpaid taxes. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Eastern District of Kentucky.
- In August 2015, F. William Messier, a Maine businessman who earned income by leasing telecommunications towers located on his property, was sentenced to one year and one day in prison for conspiracy to defraud the United States and corruptly endeavoring to impair and impede the due administration of the internal revenue laws. Messier attempted to obstruct the IRS by, among other things, providing false tax documents to customers, submitting a fake money order and other false documents to the IRS, and dealing extensively in cash. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of Maine.
- In April 2015, John Fall, a Rhode Island real estate consultant, was sentenced to 30 months in prison for obstructing the IRS, tax evasion, and aiding in the filing of false corporate tax returns. Fall used nominee entities and business names to conceal his business and financial transactions, caused false tax returns to be filed in the name of his wife’s dental practice, and attempted to obstruct an IRS audit by encouraging his wife’s accountant not to provide information to the IRS and providing false documents during the audit. This case was prosecuted by the Tax Division.
“The Justice Department, along with our colleagues in the IRS, will continue to identify and vigorously pursue those engaged in tax crimes,” said Acting Assistant Attorney General Ciraolo. “These efforts are critical to the continued integrity of our national tax system and send a strong message to those individuals who make good faith efforts to comply with their tax obligations that we will hold accountable those who do not. If someone suspects or knows of an individual or a business that is not complying with the tax laws, we encourage them to report that information to the IRS.”
More information about the Tax Division’s civil and criminal enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.
- In April 2016, James Redding, the president of an interior construction business in the District of Columbia and Maryland, was sentenced to two years in prison for failing to pay over $1.4 million in income and employment taxes. Redding also filed false tax returns on behalf of himself and his wife and on behalf of his business. Instead of paying his company’s employment taxes, Redding used company funds to pay the company’s creditors and for the benefit of himself and his family members. This case was prosecuted by the U.S. Attorney’s Office for the District of Columbia.
Justice Department Reminds Taxpayers That Willful Failure to Comply with Our Nation's Tax Laws Is a CrimeRead the Press Release
WASHINGTON - With the annual tax return filing deadline approaching, the Justice Department’s Tax Division reminds U.S. taxpayers that willful failure to comply with our nation’s tax laws is a crime. Whether they willfully fail to file returns, file false returns, or evade tax due, taxpayers who cheat will face serious consequences including prison and monetary sanctions.
“Our nation depends on all taxpayers, regardless of age, profession or economic status, to file accurate returns and promptly pay their taxes,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. “Individuals and businesses that willfully fail to comply with their legal responsibilities harm not only the U.S. Treasury, but also all Americans who are paying their fair share. The department is committed to continuing to aggressively prosecute those individuals who seek to circumvent U.S. tax laws.”
“Paying taxes is not a choice but a responsibility,” said Chief Richard Weber of the Internal Revenue Service-Criminal Investigation (IRS-CI). “IRS-Criminal Investigation works with our partners at the Department of Justice to enforce our nation’s tax laws and ensure that we are all playing by the same rules. IRS-CI special agents are specifically trained to investigate complex financial fraud, and bring their considerable skill and experience to these investigations. Those who think they can evade our efforts will find they are terribly mistaken.”
Over the past year, the Tax Division and the U.S. Attorney’s Offices have worked closely with the IRS and other law enforcement partners to enforce the nation’s tax laws fully, fairly and consistently through criminal investigations and prosecutions across the country.
Failure to File Tax Returns and Failure to Pay Taxes
- In April 2016, James Redding, the president of an interior construction business in the District of Columbia and Maryland, was sentenced to two years in prison for failing to pay over $1.4 million in income and employment taxes. Redding also filed false tax returns on behalf of himself and his wife and on behalf of his business. Instead of paying his company’s employment taxes, Redding used company funds to pay the company’s creditors and for the benefit of himself and his family members. This case was prosecuted by the U.S. Attorney’s Office for the District of Columbia.
- In September 2015, Thomas Tilley, a businessman in North Carolina, was sentenced to 32 months in prison and ordered to pay more than $7 million in restitution to the IRS for a decades-long scheme, which included his failure to file returns despite earning a substantial income, sending fraudulent financial instruments to the IRS in an effort to discharge his tax debt, using nominee entities and sham trusts to purchase and sell real estate and placing false liens on his properties to prevent the IRS from collecting his taxes. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Middle District of North Carolina.
- In June 2015, Ronald Martin, the former owner and operator of a New Hampshire construction company, pleaded guilty to three counts of tax evasion. Martin failed to file corporate or individual tax returns despite the fact that his company generated more than $1 million in gross revenue over a three year period. Martin also attempted to conceal the business revenue from the IRS by directing that payments be made in his nephew’s name, depositing only a fraction of the business receipts into the business’s bank accounts, and diverting a significant portion to his personal use. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of New Hampshire.
Filing False Tax Returns
- In March 2016, Lorenzo Shane Stewart, the owner of an excavation and construction business in Illinois, was sentenced to 30 months in prison following his guilty plea to tax evasion. Stewart failed to report his business income on his tax returns and failed to pay more than $1.12 million in income taxes. This case was prosecuted by the U.S. Attorney’s Office for the Central District of Illinois.
- In February 2016, Avan Nguyen, the owner of a wholesale beauty supply business in Texas, was sentenced to three years in prison, ordered to forfeit $1.1 million, and ordered to pay restitution to the IRS for aiding and assisting in the filing of a false tax return. Nguyen caused a tax return to be filed for his company that omitted nearly $5 million of income. This case was prosecuted by the U.S. Attorney’s Office for the Northern District of Texas.
- In November 2015, Tammy Denise Westbrooks, a Texas resident and manager of a tax return preparation business in Charlotte, North Carolina, was convicted for filing false tax returns and attempting to obstruct the IRS. Westbrooks underreported her net business profit by inflating her business expenses, paid workers in cash, and failed to file the required Forms W-2 and 1099 to report workers’ compensation to the government. This case was prosecuted by the Tax Division.
Concealing Income and Assets Through Nominee Entities and Offshore Bank Accounts
- In April 2016, Michael D. Brandner, an Alaska plastic surgeon, was sentenced to four years in prison for wire fraud and tax evasion. After his wife filed for divorce, Brandner collected millions of dollars in marital assets and drove from Tacoma, Washington, to Costa Rica, where he opened two bank accounts into which he deposited over $350,000 in cash and hid a thousand ounces of gold in a safe deposit box. He then traveled to Panama where he opened an account under the name of a sham corporation and in 2008, deposited $4.6 million into the account. Brandner concealed both the existence of the accounts and the interest income earned on those accounts from the court in the divorce proceedings and from the IRS. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of Alaska.
- In January 2016, Gregory Claxton, a Michigan certified public accountant and tax return preparer, pleaded guilty to tax evasion after he concealed assets from the IRS to avoid paying nearly $150,000 in taxes. Claxton admitted he deposited the proceeds of his business into bank accounts in his wife’s name to avoid the appearance that he had the ability to pay his income taxes. Claxton also admitted that, just two days prior to meeting with the IRS to discuss his ability to pay his outstanding tax bill, he transferred title to his house to a trust in his wife’s name in an effort to thwart IRS collection efforts. This case was prosecuted by the U.S. Attorney’s Office for the Western District of Michigan.
- In October 2015, Terry Myr, a Michigan mechanic, who specialized in repairing classic and rare cars, including Ferraris, was sentenced to two years in prison for tax evasion and failure to file tax returns. Myr attempted to prevent the IRS from collecting nearly $200,000 in taxes by transferring property to third parties, using nominee companies and dealing in cash. Myr also failed to file tax returns for multiple years to report his income to the government. This case was prosecuted by the Tax Division.
Using Businesses to Pay Personal Expenses
- In March 2016, Faiger Blackwell, the owner of a North Carolina funeral home and other businesses, was sentenced to two years in prison for tax fraud and bankruptcy fraud. Blackwell filed for bankruptcy after accumulating more than $300,000 in federal taxes and more than $1 million in other debts. During the bankruptcy proceedings, Blackwell concealed rental income and used the money to pay for business and personal expenses. After the IRS levied one of Blackwell’s business bank accounts, he set up another company and corresponding bank accounts to divert and conceal funds and circumvent the levy. Blackwell used these funds to pay business and personal expenses, including paying for a cruise. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Middle District of North Carolina.
- In September 2015, Sheila Mohammed, a doctor in Florida, was sentenced to one year in prison and ordered to pay restitution for filing false income tax returns for herself and her medical practice. Mohammed used the more than one million dollars she failed to disclose to the IRS to purchase vehicles and properties in Florida, Hawaii and New Mexico. This case was prosecuted by the U.S. Attorney’s Office for the Northern District of Florida.
Obstructing IRS Efforts to Assess and Collect Taxes
- In January 2016, James S. Faller II, a former private investigator and legal consultant in Kentucky, was sentenced to serve three years in prison for obstructing the IRS, tax evasion and failing to file tax returns. Faller failed to file tax returns to report his income, which ranged from $126,000 to $289,000 per year, and attempted to hide his income from the IRS by having his income paid to a nominee and using nominee bank accounts. Faller also signed and submitted a false Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, to an IRS revenue officer as part of the IRS’s efforts to collect his unpaid taxes. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the Eastern District of Kentucky.
- In August 2015, F. William Messier, a Maine businessman who earned income by leasing telecommunications towers located on his property, was sentenced to one year and one day in prison for conspiracy to defraud the United States and corruptly endeavoring to impair and impede the due administration of the internal revenue laws. Messier attempted to obstruct the IRS by, among other things, providing false tax documents to customers, submitting a fake money order and other false documents to the IRS, and dealing extensively in cash. This case was prosecuted jointly by the Tax Division and the U.S. Attorney’s Office for the District of Maine.
- In April 2015, John Fall, a Rhode Island real estate consultant, was sentenced to 30 months in prison for obstructing the IRS, tax evasion, and aiding in the filing of false corporate tax returns. Fall used nominee entities and business names to conceal his business and financial transactions, caused false tax returns to be filed in the name of his wife’s dental practice, and attempted to obstruct an IRS audit by encouraging his wife’s accountant not to provide information to the IRS and providing false documents during the audit. This case was prosecuted by the Tax Division.
“The Justice Department, along with our colleagues in the IRS, will continue to identify and vigorously pursue those engaged in tax crimes,” said Acting Assistant Attorney General Ciraolo. “These efforts are critical to the continued integrity of our national tax system and send a strong message to those individuals who make good faith efforts to comply with their tax obligations that we will hold accountable those who do not. If someone suspects or knows of an individual or a business that is not complying with the tax laws, we encourage them to report that information to the IRS.”
More information about the Tax Division’s civil and criminal enforcement efforts in these and other areas is on the division’s website. The IRS website also has information about how to report tax fraud.
Jamaican Native Pleads Guilty to Assaulting A Federal OfficerRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Seymour Ellis, 43, most recently of Queens, NY, pleaded guilty to assault of a federal officer, before Chief U.S. District Judge Frank P. Geraci. The charge carries a maximum penalty of eight years in prison.Special Assistant U.S. Attorney Brian J. Counihan, who is handling the case, stated that in April 2015, the defendant, while in custody at the Buffalo Federal Detention Facility in Batavia, NY, attacked and assaulted a detention officer. Ellis was awaiting removal from the United States to Jamaica. The defendant lost his permanent resident status because of New York State narcotics trafficking, robbery, and theft convictions.
The plea is the result of an investigation by Immigration and Customs Enforcement, Enforcement and Removal Operations, under the direction of Special Agent in Michael Phillips.
Sentencing is scheduled for July 15, 2016 at 10:30 a.m. before Judge Geraci.
Iowa City Men Found Guilty in Heroin Distribution CaseRead the Press Release
DAVENPORT, IA – On April 12, 2016, Alfred Latrell Jackson, 25, and Curtis Lee Kemp, 49, both of Iowa City, Iowa, were found guilty following a four day jury trial for their involvement in a heroin distribution conspiracy, announced Acting United States Attorney Kevin E. VanderSchel. United States District Court Judge Stephanie M. Rose presided over the jury trial. Jackson was found guilty of one count of conspiracy to distribute at least 100 grams of heroin. Kemp was found guilty of one count of conspiracy to distribute heroin and three counts of distribution of heroin.
Evidence was presented at trial that between December 2013 and May 2015, Jackson and Kemp conspired with others to distribute heroin in the Iowa City area. Kemp will be sentenced by Judge Rose on August 19, 2016, at 8:30 a.m. He may be sentenced up to twenty years on each of the four counts he was found guilty. Jackson will be sentenced by Judge Rose on August 19, 2016, at 11:15 a.m., and faces a maximum sentence of forty years imprisonment.
This matter was investigated by the Johnson County Multi-Jurisdictional Drug Task Force, Johnson County Sheriff’s Office, Coralville Police Department, Iowa Division of Narcotics Enforcement, Drug Enforcement Agency, Iowa City Police Department, North Liberty Police Department, University of Iowa Police Department, Muscatine County Drug Task Force, and the Washington County Drug Force. The case was prosecuted by the United States Attorney’s Office for the Southern District of Iowa.
Interactive drug education program returns to Harrison County, WV schoolsRead the Press Release
BRIDGEPORT, WEST VIRGINIA – Students in Harrison County, West Virginia participated in a dynamic drug education and prevention initiative this week, United States Attorney William J. Ihlenfeld, II, announced.
Seventh and tenth grade students at Mountaineer Middle School, Bridgeport Middle School, Bridgeport High School, and South Harrison Middle School are participating in an initiative known as “Drug Prevention On The Move!” The centerpiece of the “On The Move” program is a unique, interactive mobile classroom trailer where students learn about a variety of drugs and their effects on the body and brain. Students answer questions electronically, providing useful insight into their perceptions of various drugs. The students also participate in an interactive impaired and distracted driving simulation.
“Empowering young people to make informed decisions based on accurate, factual information about illicit drugs is a critical component of the continued effort to loosen the grip of substance abuse and addiction in our region,” noted U.S. Attorney Ihlenfeld. “I commend Harrison County Schools for their continued dedication to providing their students with innovative and impactful drug education and prevention initiatives like the ‘On The Move!’ trailer.”
The “On The Move!” program, which originally visited Harrison County in December 2015, is an initiative of Operation UNITE, a non-profit organization based in London, Kentucky. Operation UNITE works to rid communities of illegal drug use through undercover investigations, treatment, support, and education. The educational trailer is also provided in partnership with the United States Health Resources and Services Administration and the Appalachia High Intensity Drug Trafficking Area, an initiative of the White House Office of National Drug Control Policy.
Immigration Charges Unsealed Against Liberian NationalRead the Press Release
PHILADELPHIA – An indictment was unsealed today charging Mohammed Jabbateh, 49, a citizen of Liberia residing in East Lansdowne, PA, with immigration fraud and perjury, announced United States Attorney Zane David Memeger and Acting Special Agent-in-Charge Jack Staton, Homeland Security Investigations. Jabbateh, a/k/a “Jungle Jabbah,” is charged with two counts of fraud in immigration documents and two counts of perjury.
According to the indictment, in December of 1998, when making application for asylum and later for permanent legal residency, the defendant was not truthful about his activities during Liberia’s first civil war while he was a member of The United Liberation Movement for Democracy in Liberia (ULIMO) and later ULIMO-K, a rebel group that battled for control of Liberia. Jabbateh was a commander or higher ranking officer in ULIMO and ULIMO-K. According to the indictment, Jabbateh, during his overall time as a ULIMO commander or higher ranking officer, either personally committed, or ordered ULIMO troops under his command to commit the following nonexclusive list of acts: 1) the murder of civilian noncombatants; 2) the sexual enslavement of women; 3) the public raping of women; 4) the maiming of civilian noncombatants; 5) the torturing of civilian noncombatants 6) the enslavement of civilian noncombatants; 7) the conscription of child soldiers; 8) the execution of prisoners of war; 9) the desecration and mutilation of corpses; and 10) the killing persons because of race, religion, nationality, ethnic origin or political opinion.
In January of 1999, during the asylum seeking process, Jabbateh was interviewed by an immigration asylum officer for purposes of determining whether his application should be granted. To this end, it is alleged that Jabbateh falsely responded "no" to the following two queries: 1) "[H]ave you ever committed a crime?"; and 2) "[H]ave you ever harmed anyone else?" On or about December 23, 1999, Jabbateh, largely based upon his answers to questions posed on his Form I-589 asylum application and his answers to questions posed during his asylum application interview, received asylum.
It is alleged that when Jabbateh applied for legal permanent residency by filing a Form I-485 with United States immigration authorities, he falsely responded "No" to the following two questions:
Have you ever engaged in genocide, or otherwise ordered, incited, assisted or otherwise participated in the killing of any person because of race, religion, nationality, ethnic origin or political opinion?
Are you under a final order of civil penalty for violating section 274C of the Immigration and Nationality Act for use of fraudulent documents or have you, by fraud or willful misrepresentation of a material fact, ever sought to procure, procured, or procured, a visa, other documentation, or entry into the U.S. or any immigration benefit?
According to the indictment, the defendant knew his answer was false in that he had ordered, incited, assisted, and otherwise participated in the killing of any person because of religion, nationality, ethnic origin, and political opinion; and knew that he had procured asylum in the United States by fraud and willful misrepresentation of material fact.
“This defendant allegedly committed unspeakable crimes in his home country, brutalizing numerous innocent victims,” said Memeger. “He then sought to escape to the United States where he lied about his criminal background on federal immigration forms. This office will use whatever tools are available to bring to justice serious criminals who abuse our immigration process by concealing their background and history.”
“The United States has always welcomed refugees and those fleeing oppression, but we will not be a safe haven for alleged human rights violators and war criminals,” said Staton.
If convicted, Jabbateh faces a maximum possible sentence of 30 years in prison, a possible fine, a $400 special assessment, and a period of supervised release.
The case was investigated by U.S. Homeland Security Investigations and is being prosecuted by Assistant United States Attorney Linwood C. Wright, Jr.
To support the victims in this case and others in the community that may have been victimized by Jabbateh but have not yet reported, Homeland Security Investigations has established a Victim Assistance Hotline. Impacted individuals are encouraged to call (215) 717-4987 to speak with a Victim Assistance Specialist.
An Indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Hopkinton Felon Sentenced to Federal Prison for Attempting to Manufacture Meth with his WifeRead the Press Release
A Hopkinton felon who attempted to manufacture methamphetamine with his wife in June 2015 was sentenced yesterday to nearly twenty years in federal prison.
Jody Lee Davis, 47, from Hopkinton, Iowa, received the prison term after a November 16, 2015 guilty plea to one count of Attempted Manufacture and Aiding and Abetting the Attempted Manufacture of Methamphetamine. At the guilty plea, Davis admitted he had three prior methamphetamine-related Iowa felony convictions when, on June 20, 2015, he tried to manufacture methamphetamine and helped his wife, Lisa Ann Davis, try to do the same. Deputies with the Delaware County Sheriff’s Office arrested the Davises following the execution of a search warrant at their Hopkinton home on June 20, 2015. In November 2015, a jury convicted Lisa Ann Davis of three federal methamphetamine-related charges. She is awaiting sentencing.
Davis was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Davis was sentenced to 210 months’ imprisonment. A special assessment of $100 was imposed. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. Davis is being held in the United States Marshal’s custody until he can be transported to a federal prison.
The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and Special Assistant United States Attorney Erin Eldridge and investigated by the Delaware County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file number is 15-CR-2028-1.
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Hogansburg, Ny Man Charged with Shipping and Possessing Contraband CigarettesRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that Ian Tarbell, 43, of Hogansburg, NY, was arrested and charged by criminal complaint with possession of contraband cigarettes, failing to maintain information about the shipment, sale and distribution of more than 10,000 cigarettes and refusing to pay and evading the payment of a tax. The charges carry a maximum penalty of five years in prison, and a fine of $250,000.Assistant U.S. Attorney Russell T. Ippolito, Jr., who is handling the case, stated that according to the complaint, the defendant was arrested on February 16, 2016 in Pembroke, NY following a traffic stop by the Genesee County Sheriff’s Office. Tarbell was operating a truck that was pulling a trailer containing untaxed and unstamped cigarettes. In total, the defendant is accused of shipping and transporting more than 900,000 unstamped and untaxed cigarettes.
Tarbell made an initial appearance this morning before U.S. Magistrate Judge Michael J. Roemer and was released on $100,000 bond.
The complaint is the result of an investigation by the Genesee County Sheriff’s Office, under the direction of Gary Maha, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Delano A. Reid, Special Agent in Charge, new York Field Division.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Hanson Man Charged with Child EnticementRead the Press Release
BOSTON – A Hanson man was arrested today and charged in U.S. District Court in Boston in connection with sending sexually explicit videos to two pre-teen girls.
Mark L. Leach, 48, was charged in a criminal complaint with one count of coercion and enticement of a child. Leach is scheduled to appear before U.S. District Court Magistrate Judge M. Page Kelley at 4:30 p.m. today.
According to the complaint, law enforcement learned that Leach had used the Skype screen name “funtimehockey” to send sexually explicit messages via text, live video and audio with two pre-teen girls. The victims told law enforcement that Leach asked them to send naked and sexually explicit photos and videos of themselves. Leach also allegedly exposed himself.
Leach was arrested by law enforcement this morning as he was leaving his home. According to the complaint, during a consensual interview, Leach admitted that he had set up the Skype account to communicate with the minor girls, and requested that the girls expose themselves to him during conversations. He also admitted that he masturbated in front of them.
The charging statute provides for a minimum mandatory sentence of 10 years and no greater than a lifetime in prison, up to a lifetime of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; Hanson Police Chief Michael Miksch; and Whitman Police Chief Scott D. Benton, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Kenneth G. Shine of Ortiz’s Major Crimes Unit.
Members of the public who have questions, concerns or information related to this case, or any information relating to the sexual exploitation of children, should call (617) 748-3274.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Hamden Man Sentenced to 5 Years in Federal Prison for Illegal Gun PossessionRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that CHRISTOPHER DUNCAN, also known as “Woozer,” 31, of Hamden, was sentenced today by U.S. District Judge Vanessa L. Bryant in Hartford to 60 months of imprisonment, followed by five years of supervised release, for illegally possessing a firearm.
According to court documents and statements made in court, on November 20, 2014, law enforcement officers made a controlled purchase of PCP from DUNCAN in New Haven. After the purchase, investigators followed the car DUNCAN was driving to a store on Kimberly Avenue in New Haven and observed DUNCAN entering the store. Investigators then entered the store and placed DUNCAN under arrest. A subsequent court-authorized search of DUNCAN’s vehicle revealed a Ruger nine millimeter handgun with a large capacity clip, which was located on the floor in front of the driver’s seat.
DUNCAN was originally arrested on state drug and firearm offenses. On January 29, 2015, he was charged federally and has been detained since that time. On January 13, 2016, he pleaded guilty to one count of carrying of a firearm in furtherance of a drug trafficking crime.
This matter was investigated by Federal Bureau of Investigation, the New Haven Police Department and the Milford Police Department. The case was prosecuted by Assistant U.S. Attorney Peter D. Markle.
Gang Member Pleads Guilty to Trafficking Crack CocaineRead the Press Release
PROVIDENCE, R.I. – Jaheeim Benton, 26, of Pawtucket, a member of the YNIC street gang, pleaded guilty in federal court in Providence today to trafficking crack cocaine, announced United States Attorney Peter F. Neronha and Daniel J. Kumor, Special Agent in Charge of the Boston Field Division of the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
According to court documents, on at least six occasions between January and November 2015, Benton sold a person, who was assisting an ATF law enforcement task force in their investigation of Benton’s gang and drug trafficking activities, several plastic baggies containing crack cocaine. Each of the transactions was monitored by law enforcement.
In addition, according to a plea agreement filed in this matter, a court authorized search of Benton’s residence on November 4, 2015, resulted in the seizure of approximately 1.2 grams of crack cocaine and numerous items used in the packaging and distribution of crack cocaine.
Appearing before U.S. District Court Chief Judge William E. Smith, Benton pleaded guilty possession with the intent to distribute crack cocaine.
Benton, who has been detained in federal custody since his arrest on November 4, 2015, is scheduled to be sentenced on July 15, 2016. According to court records and information presented to the court, Benton was previously convicted in Rhode Island state court on multiple assault and firearms charges.
The case is being prosecuted by Assistant U.S. Attorney Milind M. Shah.
This matter was investigated by an ATF Task Force consisting of agents and officers from ATF; Providence, Cranston, Central Falls and Pawtucket Police Departments; and the Special Investigations Unit at the Rhode Island Department of Corrections.
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Jim Martin (401) 709-5357
email: [email protected]
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Fort Hall Woman Pleads Guilty to Assault on an OfficerRead the Press Release
POCATELLO – Demetres Ish, 23, of Fort Hall, Idaho, pleaded guilty today in United States District Court to assault on an officer, U.S. Attorney Wendy J. Olson announced. Ish was indicted by the federal grand jury in Pocatello on October 27, 2015.
On March 30, 2015, a Fort Hall Police officer who was a school resource officer at the Sho-Ban Junior/Senior High School spoke to a student who was a passenger in a vehicle which was parked in front of the school. The officer confirmed that the driver of the vehicle, Demetres Ish, had two active tribal court warrants for her arrest on file. The officer tried to get Ish to voluntarily go with him to into custody on the warrants, but she began to argue with the officer and refused to get out of the vehicle. Another officer arrived to assist and Ish fought with both officers and resisted their efforts to remove her from the vehicle. When she was finally removed from the vehicle officers handcuffed her and put her on the ground while the officers dealt with another matter. She slipped out of her handcuffs and went over to one of the officers and kicked him in the back. She was then handcuffed again and eventually taken to jail. Under the specific federal law that Ish pleaded guilty to violating, Fort Hall police officers are considered “federal officers.”
The charge of assault on an officer is punishable by up to eight years in prison, up to three years of supervised release, and a fine of up to $250,000.
Ish is scheduled to be sentenced on June 23, 2016, before Chief U.S. District Judge B. Lynn Winmill at the federal courthouse in Pocatello.
The case was investigated by the Fort Hall Police Department and the Federal Bureau of Investigation.
Former Postal Employee Sentenced on Conspiracy ChargesRead the Press Release
St Louis, MO – Quentin Cook, Florissant, MO, was sentenced to 48 months in prison. In February, after a three-day trial before United States District Judge Ronnie L. White, he was convicted of diverting mail believed to contain clothing, marijuana and other items to addresses that he and his co-defendants controlled. Cook and his co-defendants were former Postal employees of the Network Distribution Center in Hazelwood.
According to court documents and testimony presented at trial, Edward Lewis, Sean West, Korey Howard and Quentin Cook are former employees of the United States Postal Service. West, Howard and Cook searched for and identified mail and over-labeled it to redirect it from its original sender’s intended recipient to themselves, Lewis and others. The diverted mail included clothing, marijuana, electronics, computer equipment, pottery and personal effects.
Korey Howard, Florissant, MO; Edward Lewis, Hazelwood, MO; and Sean West, Florissant, MO, pled guilty to multiple charges, including conspiracy, obstruction of correspondence and theft or receipt of stolen mail in December 2015. Howard and West were each sentenced to 24 months in prison. Edward Lewis will be sentenced later this month.
This case was investigated by the U.S. Postal Service-Office of Inspector General and the Postal Inspection Service. Assistant United States Attorneys Anthony Franks and Dianna Collins handled the case for the U.S. Attorney’s Office.
Former Part-Time Associate Pastor to Serve Nine Years in Federal Prison for Defrauding InvestorsRead the Press Release
Fort Smith, Arkansas – Kenneth Elser, United States Attorney for the Western District of Arkansas, announced that Thomas Edward James, age 34, of Phoenix, Arizona, formerly of Fort Smith, was sentenced to 108 months imprisonment and three years of supervised release on one count of Mail Fraud and 36 months imprisonment and one year of supervised release on one count of Making a False Tax Return; the sentences are to run concurrently with each other. He was also ordered to pay restitution in the amount of $524,203.46. The Honorable Chief Judge P.K. Holmes, III, presided over the sentencing hearing in the United States District Court in Fort Smith.
According to facts set forth in the plea agreement, the defendant, Thomas Edward James, was a part-time associate pastor at St. James Missionary Baptist Church in Fort Smith, Arkansas who fraudulently induced his victims, a majority of whom were retired and members of the St. James Missionary Baptist Church, to invest their funds in what he falsely represented to be U.S. Treasury Bonds with a rate of return of in excess of 20 percent when in fact James did not invest the funds but converted them to his personal use. James also admitted as part of his plea agreement that he filed false tax returns from 2008-2012, and that he owed the United States additional taxes in the amount of $205,566.46. James pleaded guilty to an Information that was filed on September 10, 2015.
“James used his position as a pastor, a position of trust, to prey on investors and steal their hard earned money,” stated Tracey D. Montaño, Special Agent in Charge, IRS-Criminal Investigation. “This case should be a reminder, no matter the source of income, all income is taxable. The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy. We are proud to work with our other law enforcement partners to bring this case to a successful resolution.”
“Today, justice was served as James was sentenced for his despicable participation in defrauding his trusting church members and falsifying his tax returns,” said Assistant Special Agent in Charge David Shepard of the Federal Bureau of Investigation in Little Rock. “We appreciate the efforts of the United States Attorney’s Office, the Internal Revenue Service, and the Fort Smith and Fayetteville Police Departments.”
This case was investigated by The Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI) and Financial Crimes Task Force officers from the Fort Smith and Fayetteville Police Departments. Assistant United States Attorney Mark Webb prosecuted the case for the United States.
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Related court documents may be found on the Public Access to Electronic Records website @ www.pacer.gov
Former KC Attorney Pleads Guilty to $1.2 Million Fraud SchemeRead the Press Release
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a former Kansas City, Mo., attorney pleaded guilty in federal court today to stealing more than $1.2 million from St. Luke’s Health System, a client of his former law firm.
Alan B. Gallas, 64, of Kansas City, waived his right to a grand jury and pleaded guilty before U.S. District Judge Beth Phillips to a federal information that charges him with mail fraud. Gallas was an attorney and partner in the law firm of Gallas & Shultz in Kansas City, Mo. He surrendered his license to practice law in Missouri and Kansas in November 2015.
By pleading guilty today, Gallas admitted that he engaged in a scheme from 2009 through July 2015 to defraud a client, St. Luke’s Health System, of monies collected by his law firm totaling $1,224,264. Under the terms of today’s plea agreement, Gallas must pay $1,224,264 in restitution to St. Luke’s.
Gallas was the attorney responsible for the St. Luke’s account at the law firm. After attempting to collect on patient accounts for a period of time, St. Luke’s would transfer its larger outstanding patient accounts to Gallas & Shultz for collection. As payments on patient accounts were received, the payments were logged into the case management system for the appropriate patient account. The monies were then deposited into the law firm’s trust account. On a periodic basis, often monthly, the firm would remit the patient payments collected to St. Luke’s.
Gallas admitted today that he caused personnel at the law firm to withhold money from payments made to St. Luke’s by placing thousands of payments on “hold” status, then directing those funds be transferred from the trust account to the firm’s operating account. The pattern of not remitting some payments to St. Luke’s escalated significantly from 2012 to 2015. According to court documents, Gallas withheld 601 payments totaling $211,391 in 2012. Gallas withheld 699 payments totaling $266,696 in 2013. Gallas withheld 625 payments totaling $227,892 in 2014. Through the month of July 2015, Gallas withheld 625 payments totaling $216,845.
Under federal statutes, Gallas is subject to a sentence of up to 20 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by the FBI.
Former Insurance Agency Owner Sentenced to More Than 6 Years in Federal Prison for $2 Million Fraud SchemeRead the Press Release
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that EARL O’GARRO, JR., 33, formerly of Marlborough, was sentenced today by U.S. District Judge Alvin W. Thompson in Hartford to 78 months of imprisonment, followed by three years of supervised release, for defrauding a specialty lender, insurance carriers and the State of Connecticut.
On December 14, 2015, a jury found O’GARRO guilty of two counts of wire fraud and one count of mail fraud.
According to the evidence at trial, O’GARRO was the President, Chief Executive Officer and an owner of Hartford-based Hybrid Insurance Agency, LLC (“Hybrid”), a wholesale insurance brokerage specializing in placing excess and surplus line insurance products.
Beginning in approximately April 2013, O’GARRO defrauded Capital Premium Financing, Inc., a specialty lender that provides premium financing on behalf of insured entities. O’GARRO falsely represented to Capital Premium Financing that an insurance carrier, AmTrust E&S Insurance Services, Inc. (“AmTrust”), had issued insurance policies for four companies, that these companies were using Capital Premium Financing’s services to finance their premium payments, and that Hybrid had brokered the contracts and was entitled to collect the premiums on behalf of AmTrust. In fact, O’GARRO knew that AmTrust had not issued policies for any of these four companies. Relying on O’GARRO’s misrepresentations, Capital Premium Financing subsequently released $849,282.55 in premium payments to Hybrid on the purported insurance policies. O’GARRO converted the funds to his own use.
In July 2013, as part of an effort to prolong the scheme, O’GARRO created an email address and Internet domain name similar to that of AmTrust in order to assume a false identity as an AmTrust underwriter. Posing as an AmTrust underwriter, O’GARRO sent an email to Capital Premium Financing to falsely verify the existence of the four policies.
Hybrid also served as the wholesale broker for certain insurance policies held by the City of Hartford. In July 2013, O’GARRO directed the city to transfer $868,244 in premiums to Hybrid. After the City of Hartford wired Hybrid the funds, O’GARRO intentionally withheld $669,997 in premium payments from the appropriate excess insurance carries, Starr Indemnity & Liability Company, Inc. and National Casualty Company. Instead, O’GARRO converted the money to his own use. In fact, approximately 17 minutes after receiving the funds, O’GARRO wired $300,000 to Capitol Premium Financing as partial repayment for the monies he had been caught stealing from them. O’GARRO then falsely advised the city that the premium payments had been remitted to the insurers.
The evidence at trial also established that, in approximately July 2013, O’GARRO, on behalf of Hybrid, submitted a false application to the State of Connecticut Department of Economic and Community Development (“DECD”) for a $500,000 loan. In his application, O’GARRO provided false information concerning his and Hybrid’s financial condition. Based in part on these false statements, DECD approved Hybrid’s loan application and mailed a $250,000 check to Hybrid. O’GARRO used a substantial portion of these loan funds to make a payment on a million dollar condominium he had purchased in the Dominican Republic and to pay tuition at his children’s private school.
Through this scheme, O’GARRO stole more than $2.1 million from his victims and used the stolen funds on personal expenses and to prop up his failing business.
Judge Thompson ordered O’GARRO to pay restitution in the amount of $1,307,326.09, which reflects a partial repayment that O’GARRO made to one of his victims.
O’GARRO has been released on a $500,000 bond since his arrest on November 21, 2014. He was ordered to report to prison on May 13, 2016.
This matter was investigated by the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Avi M. Perry and Michael J. Gustafson.
Former Health Care Clinic Consultant and Biller Sentenced to 135 Months in Miami for Role in $63 Million Medicare Fraud SchemeRead the Press Release
A former health care clinic consultant and Medicare biller was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme involving a now-defunct Miami health provider.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Nery Cowan, 53, of Miami, was sentenced yesterday by U.S. District Judge Beth Bloom of the Southern District of Florida. Cowan pleaded guilty to one count of conspiracy to commit money laundering on Jan. 14, 2016.
As part of her guilty plea, Cowan admitted to serving as a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc. (Greater Miami), a partial hospitalization program (PHP) located in Miami, which purported to provide intensive treatment for the severely mentally ill. During the course of the scheme, Cowan directed and authorized the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals, she admitted. Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false and fraudulent claims to Medicare. Cowan received a percentage of the Medicare reimbursement from Greater Miami’s PHP as compensation, she admitted.
Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida. According to her plea, Cowan, Butler and Mora disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company.
On Nov. 30, 2015, Judge Bloom sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.
According to court documents, from 2006 through 2014, Greater Miami billed Medicare approximately $63 million for purported mental health services.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. Assistant Chief Allan J. Medina and Trial Attorney Elizabeth Young of the Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Former Health Care Clinic Consultant and Biller Sentenced to 135 Months in Miami for Role in $63 Million Medicare Fraud SchemeRead the Press Release
A former health care clinic consultant and Medicare biller was sentenced to 135 months in prison and ordered to pay a $100,000 fine for her role in laundering money in connection with a $63 million health care fraud scheme involving a now-defunct Miami health provider.
U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Nery Cowan, 53, of Miami, was sentenced yesterday by U.S. District Judge Beth Bloom of the Southern District of Florida. Cowan pleaded guilty to one count of conspiracy to commit money laundering on Jan. 14, 2016.
As part of her guilty plea, Cowan admitted to serving as a consultant and Medicare biller for Greater Miami Behavioral Healthcare Center Inc. (Greater Miami), a partial hospitalization program (PHP) located in Miami, which purported to provide intensive treatment for the severely mentally ill. During the course of the scheme, Cowan directed and authorized the payment of kickbacks and bribes to patient brokers and others in exchange for Medicare beneficiary referrals, she admitted. Cowan also admitted that Greater Miami personnel routinely falsified medical records affiliated with these recruited Medicare beneficiaries to support false and fraudulent claims to Medicare. Cowan received a percentage of the Medicare reimbursement from Greater Miami’s PHP as compensation, she admitted.
Cowan also admitted that she, along with co-defendants Dean Butler and Irina Mora, took great lengths to conceal kickback payments to shell companies owned by “patient brokers” who, on behalf of Greater Miami, solicited Medicare beneficiaries from assisted living facilities, halfway houses and drug courts located throughout the Southern District of Florida. According to her plea, Cowan, Butler and Mora disguised these monthly kickbacks as “outreach” or “marketing” payments through HNB-Stell Care Inc., a sham staffing company.
On Nov. 30, 2015, Judge Bloom sentenced Butler and Mora to 16 years and nine years in prison, respectively, following their guilty pleas.
According to court documents, from 2006 through 2014, Greater Miami billed Medicare approximately $63 million for purported mental health services.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division's Fraud Section and the U.S. Attorney's Office for the Southern District of Florida. Assistant Chief Allan J. Medina and Trial Attorney Elizabeth Young of the Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,000 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Former Fox40 Web Producer Sentenced to Prison for Attack on Media SitesRead the Press Release
SACRAMENTO, Calif. — Matthew Keys, 29, former web producer and network site administrator for KTXL FOX40, a Sacramento television station, was sentenced today to two years in prison for inciting, assisting, and conducting a weeks-long campaign of online attacks against FOX40 and The Los Angeles Times, United States Attorney Benjamin B. Wagner and FBI Special Agent in Charge Monica M. Miller announced.
On October 7, 2015, following an eight-day trial, a jury found Keys guilty of one count of conspiracy to make unauthorized changes to the Tribune Company’s websites and damage its computer systems, one count of transmitting malicious code, and one count of attempted transmission of malicious code.
At sentencing, United States District Judge Kimberly J. Mueller stated: “Ultimately, his downfall came from playing his former employer against Anonymous, while holding himself out as a professional journalist. … The mask that Mr. Keys put on appeared to allow a heartless character to utter lines that are unbecoming a journalist.” Judge Mueller ordered Keys to begin serving his sentence on June 15, 2016.
“Although this case has drawn attention because of Matthew Keys’ employment in the news media, this was simply a case about a disgruntled employee who used his technical skills to taunt and torment his former employer,” said U.S. Attorney Wagner. “Although he did no lasting damage, Keys did interfere with the business of news organizations, and caused the Tribune Company to spend thousands of dollars protecting its servers. Those who use the Internet to carry out personal vendettas against former employers should know that there are consequences for such conduct.”
“Matthew Keys will spend the next two years in prison,” said Assistant Special Agent in Charge Tom F. Osborne. “This sentence serves as a warning that those who engage in this type of behavior face harsh penalties.”
According to evidence produced at trial, Keys was a site administrator for FOX40’s access to Tribune Company’s content management system (CMS). Tribune Company’s various broadcast and print media properties all used the CMS to publish their news content on the Internet. Keys had an argument with his supervisor on October 28, 2010, after which time FOX40 terminated Keys’ CMS user account, and Keys never returned to work. Secretly, Keys had maintained an unauthorized access point through a set of unauthorized “super user” credentials.
In his own words, Keys later admitted that he was “angry” and “hurt.” Initially, he refused to relinquish control over the station’s Twitter and Facebook accounts. On November 3 and November 22, 2010, Keys used his unauthorized CMS access to download the email list of FOX40 viewers who had given the station their personal information as part of a rewards program. Then, beginning on December 1, 2010, Keys used that list to send anonymous emails denigrating the station and implying that viewer information was not secure. Simultaneously, Keys sent anonymous emails to his former supervisor at FOX40 taunting him that Tribune Company’s CMS was not secure and that corporate information security cannot defend against an insider who decides to “go rogue.” During this time, Keys also used his unauthorized network access to repeatedly deactivate the credentials of the person who took over his duties at FOX40.
According to the evidence at trial, on December 8, 2010, Keys, using the moniker “AESCracked,” appeared in chatrooms used by Anonymous. This was during the time of “Operation Payback,” when Anonymous initiated attacks on various entities that had acted against the interests of WikiLeaks. In the Anonymous chatroom, Keys posted super user credentials to the Tribune Company CMS and exhorted those present to “go f--- s--- up.” He instructed those present on what Tribune Company’s “bread and butter assets” were and what media organizations should be targeted for the “largest impact.” Keys also tutored Anonymous members on how to navigate the CMS and create super user credentials that blended in more easily on the network.
Anonymous did not immediately use the credentials for malicious purposes, and Keys spent the next few days advocating an attack on Tribune media properties. When one member said he was researching the network, Keys responded, “I did not give you those passwords for research. I want you to f--- s--- up.” On December 9, 2010, Keys posted a link to a Los Angeles Times story critical of WikiLeaks and characterized it as “yet another reason why the Times must be demolished.” On December 10, 2010, when a member of Anonymous stated opposition to attacking a media site, Keys replied, “FOX News is not media, it’s ‘infotainment’ for inbreds. I say we target them.”
At the same time that he was instigating an attack against Tribune Company and the Los Angeles Times, Keys sought credit as a journalist for predicting it. On December 12, 2010, in an email and a recorded telephone conversation, Keys declared that he had acquired “documents pertaining to future operations,” including “operations” against The Los Angeles Times.
On December 14, 2010, an Anonymous member who used the moniker “Sharpie” used backdoor credentials to deface a story on the website of the Los Angeles Times. What readers noticed on the front side of the CMS was limited because editors quickly noticed what had happened. They were able to repair the defacement within 40 minutes of the desktop site and a day on the mobile site. The next day, Keys tried to help Sharpie put up altered front-page layouts on several Tribune Company properties, but failed.
Keys’ actions involved disclosure of super user credentials and required the Tribune Company to conduct a damage assessment that lasted to late January or early February of 2011. Five high-level Tribune Company information technology professionals testified at trial that they and their subordinates spent an urgent night searching for and deactivating unauthorized credentials on the CMS. They reset every password on the network. Information security then spent weeks assessing the extent of the compromise and how the breach had occurred. They did not know whether CMS server logs themselves had been altered and whether even the authentication system itself had been compromised. Information security managers had to review whether the attack had changed archived news stories, changed newspaper circulation information, accessed payment systems, or altered the systems that printed actual newspapers. According to trial testimony, this involved “literally hundreds of servers with thousands of pages and archives and things of that nature.”
The case was the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Matthew D. Segal and Paul A. Hemesath of the Eastern District of California and Deputy Chief James A. Silver of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) prosecuted the case.
Former Cook County Sheriff’s Police Officer Sentenced to 7 1/2 Years in Prison for Robbing Drug Dealers While on DutyRead the Press Release
CHICAGO — A former police officer in the Cook County Sheriff’s Department was sentenced today to 7 1/2 years in federal prison for robbing drug dealers of cocaine, marijuana and contraband cigarettes while on duty.
ROBERT VAUGHAN admitted in a plea agreement that he robbed eight drug dealers from 2011 to 2013, earning a total profit of $300,000. Vaughan conducted the robberies with two other law enforcement officers, and the trio shared in the profits, according to the plea agreement. The robberies were carried out in Chicago, Cicero, Plainfield, Lyons, Melrose Park and Forest Park.
Vaughan, 45, of Frankfort, pleaded guilty last year to one count of robbery. U.S. District Judge Samuel Der-Yeghiayan imposed the 90-month sentence in federal court in Chicago.
“This is the type of crime one would expect to only see on a television show,” Assistant U.S. Attorney Sunil Harjani argued in the government’s sentencing memorandum. “The crimes were brazen, arrogant and detrimental to the citizens of this district. While the victims of the offense in this case garner no sympathy – they are drug dealers and contraband traffickers – it cannot excuse the outrageous conduct by Vaughan, who committed robberies using his badge and gun.”
According to the plea agreement, Vaughan was assigned to the High Intensity Drug Trafficking Area (HIDTA) team, a joint federal, state and local initiative to combat the trafficking of illegal narcotics. Vaughan admitted using his position as a police officer to orchestrate deals with drug traffickers for marijuana, cocaine and contraband cigarettes. Immediately after the transactions, Vaughan would arrest and handcuff the individuals – but then keep the narcotics for himself and release the dealers without charges. Vaughan later sold the narcotics to other dealers in exchange for cash.
Vaughan also robbed individuals and homes of marijuana based on information he had learned from confidential informants. He was arrested on Nov. 3, 2014, after he and another law enforcement officer robbed 70 pounds of marijuana from an individual whom they believed was a drug courier. Unbeknownst to the officers, the individual was an undercover federal agent, according to the plea agreement.
The sentencing was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.
The government is represented by Mr. Harjani.
Florida Pain Medicine Associates and its Owners Agree to Pay over One Million Dollars to Resolve False Claims Act AllegationsRead the Press Release
Florida Pain Medicine Associates, Inc. and its owners, Drs. Bart Gatz, Alexis Renta, and Albert Rodriguez have agreed to pay $1.1 million to resolve allegations that they violated the False Claims Act by billing Medicare for medically unnecessary nerve conduction studies (NCS).
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Miami Region, made the announcement.
“When health care providers bill for medically unnecessary procedures, they compromise patient care and the integrity of the Medicare program, for their own financial interests” said U.S. Attorney Wifredo Ferrer. “The United States Attorney’s Office is dedicated to investigating and resolving claims of Medicare fraud that can jeopardize the health care system.”
“When health care businesses and their owners improperly boost their profits by billing Medicare for medically unnecessary procedures, its taxpayers and patients who are left with a hefty tab,” said HHS OIG Special Agent in Charge Shimon R. Richmond. “We are committed to uprooting such schemes and eliminating waste in Federal health care programs.”
The United States alleged that patient records indicated that a substantial percentage of the NCSs that were performed at Florida Pain Medicine Associates were medically unnecessary. The NCSs were often administered without an accompanying electromyography (EMG) test, thereby substantially decreasing the diagnostic value of the procedure. This was especially true where the NCS was the sole basis for performing an epidural steroid injection.
The settlement announced today resolves allegations originally brought by Rosa Gomez, who had worked in Florida Pain Medicine Associates billing department, under the qui tam, or whistleblower provisions of the False Claims Act, which permit private individuals to sue on behalf of the government of the United States for the submission of false claims and to receive a share of any recovery. The False Claims Act authorizes the United States to intervene in such lawsuits and take over primary responsibility for litigation. Gomez’s will receive $242,000.
Mr. Ferrer commended the investigative work of HHS-OIG. The investigation and settlement were handled by Assistant U.S. Attorney Franklin Monsour.
The case is captioned United States ex rel. Gomez v. Florida Pain Medicine Associates, Inc., et al., Case No. 13-80856 CIV (S.D. Fla.). The claims settled by the lawsuit are allegations only and there has been no determination of liability.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Federal Tax Enforcement Is a Focus of Prosecutions in the First Quarter of 2016Read the Press Release
SACRAMENTO, Calif. — With the annual tax filing deadline approaching, U.S. Attorney Benjamin B. Wagner noted that his office had taken a number of criminal enforcement actions in recent months in tax evasion cases in the Eastern District of California. The U.S. Attorney’s Office works with the Internal Revenue Service – Criminal Investigation and other law enforcement partners to enforce federal tax laws.
“This is an appropriate time of year to remind those few individuals who set out to cheat or evade their tax obligations that such conduct can result in prosecution,” said U.S. Attorney Wagner. “Every year some deliberately fail to file required returns or file false and fraudulent returns in order to evade the assessment and payment of tax due. It is the obligation of this office to pursue and prosecute them for their criminal conduct.”
“All Americans have a responsibility to pay taxes. In today’s economic environment, it’s more important than ever that people feel confident that everyone is playing by the rules and paying the taxes they owe,” said Michael T. Batdorf, IRS-CI Special Agent in Charge of the Oakland Field Office. “Those who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. IRS-CI and the Department of Justice will investigate and prosecute those who violate our tax system.”
Cases involving IRS employees are investigated jointly by the Inspector General for Tax Administration (TIGTA) and IRS-CI. Rod Ammari, Special Agent-in-Charge of TIGTA’s San Francisco Field Division stated: “It is very important that the American taxpayers have confidence in the IRS and its functions. When IRS employees use their insider knowledge to file fraudulent tax returns, we are committed to prosecuting these individuals to the fullest extent of the law. IRS employees committing tax fraud cannot be tolerated.”
Indictments in the Eastern District of California so far in 2016:[1]
U.S. v. Davis — Indicted on March 31, 2016. Sherrell Davis, 42, of Benicia, allegedly submitted fraudulent claims for tax refunds in the names of other people and assisted in preparing fraudulent tax returns seeking thousands of dollars in refunds. (2:16-cr-072)
U.S. v. Black — Indicted on March 24, 2016. Kenley Black, 41, formerly of Burney, allegedly failed to file tax returns for tax years 2009 to 2013 and evaded paying more than $225,000 in taxes for those years. (2:16-cr-062)
U.S. v. Boone et al. — Indicted on February 10, 2016. Marty Boone, 54, and his wife Ronda Boone, 53, both of Vallejo, allegedly filed separate false tax returns claiming million-dollar refunds. Marty Boone was paid approximately $1.9 million, which they laundered by moving it through various accounts, including one in Cyprus. (2:16-cr-020)
U.S. v. Rocha, et al. — Indicted on January 14, 2016. Lorita Marie Rocha, 35, of Fresno, and Nereida Rodriguez, 28, of Firebaugh, allegedly filed fraudulent tax returns using stolen identities of over two dozen individuals that Rocha obtained through her employment with the IRS as a seasonal tax examiner. They claimed over $100,000 in refunds. (1:16‑cr‑001)
U.S. v. Chambers et al. — Indicted on January 14, 2016. Denna Chambers, 33, of Woodland, and Starsheka Mixon, 32, of Pinole, allegedly filed approximately 178 fraudulent income tax returns requesting more than $900,000 in refunds. (2:16-cr-010)
Convictions in 2016:
U.S. v. Cooper et al. — On April 12, 2016, Tiana Naples, 29, of Vallejo pleaded guilty to conspiring to submit false claims. On February 9, 2016, her co-defendant Leticia Roque, 49, of Vallejo, was sentenced to 30 months in prison, for conspiring to submit false claims and aggravated identity theft. Together, Naples and Roque submitted 60 false tax returns requesting more than $200,000 in refunds in the names of other people. (2:14-cr-022)
U.S. v. Kuzmenko et al. — On April 8, 2016, Aleksandr Kuzmenko, 32, of Loomis, pleaded guilty to conspiring to defraud the U.S. in connection with his participation in a tax refund fraud scheme. Kuzmenko conspired with others to file approximately 90 fraudulent tax returns with the IRS for the 2008 tax year using various identities, including some that were stolen. The fraudulent claims totaled approximately $695,000, which resulted in a loss of more than $570,000 to the IRS. (2:14-cr-044)
U.S. v. Shchirskiy et al. — On April 7, 2016, Vladislav Atamanyuk, 28, of Sacramento County, pleaded guilty to conspiring to submit fraudulent claims for tax refunds using the identities of various individuals, some of which were stolen. Atamanyuk and his co‑conspirators claimed more than $650,000 in fraudulent refunds, although the IRS issued about $88,000 in connection with the scheme. (2:14-cr-198)
U.S. v. Miller — On February 5, 2016, Linda J. Miller, 63, of Woodland, pleaded guilty to filing a false tax return. Miller provided bookkeeping services, and she admitted that on her 2008 tax return, she did not report $138,000 in checks she received. (2:15‑cr‑066)
U.S. v. Knockum — On January 29, 2016, Kenneth Knockum, 48, of Vallejo, was found guilty at trial of filing false returns seeking large refunds — two returns requested refunds of over $1.4 million each — he generated false 1099-OIDs and other tax forms to support the claimed income and taxes. The IRS caught the majority of the false returns but over $125,000 in fraudulent refunds were issued. (2:14‑cr-115)
Sentences in 2016:
U.S. v. Castro — On April 6, 2016, Yolanda Castro, 48, a 20-year employee of the IRS in Fresno, was sentenced to one year in prison and ordered to pay $37,387 in restitution for aiding in the preparation of a false tax return. Between 2007 and 2013, she prepared and filed false federal income tax returns for herself, her family members and others in which she fraudulently claimed tax deductions and credits. (1:15-cr-050)
U.S. v. Williams — On March 31, 2016, Jasmine Ann Williams, 26, of Sacramento, was sentenced to three years of probation for using her position as a volunteer tax preparer to steal two tax refunds totaling $10,745 from two individuals. Williams was also ordered to pay restitution to the two victims. (2:15-cr-206)
U.S. v. Eidson — On March 21, 2106, Brandon Adam Eidson, 34, of Turlock, was sentenced to three years and one month in prison and ordered to pay $433,205 in restitution for structuring cash transactions and filing false tax returns. Between 2008 and 2010, he underreported approximately $1.2 million in gross receipts for his business Hooked Up Hydroponics. Eidson deposited more than $1.5 million in increments of $10,000 or less in an attempt to prevent his bank from filing Currency Transaction Reports. (1:15‑cr-085)
U.S. v. Bonderer et al. — On March 10, 2016, Clint D. Bonderer, 37, of Stockton, was sentenced to three years in prison for conspiring to submit false claims. Co-defendant Slavic Khudoy, 36, of Loomis, pleaded guilty today, April 13, 2016. Bonderer and Khudoy submitted 842 fraudulent tax returns, requesting more than $600,000 in refunds in the names of other people and in most cases, kept the refunds for themselves. (2:15‑cr‑028)
U.S. v. Bolanos — In 2008, seven defendants submitted false tax returns claiming they were owed more than $33 million in refunds. In response, the IRS issued approximately $400,000 in unearned refunds. On March 7, 2016, Gaylene Lynnette Bolanos, 58, of Fresno, was sentenced to 10 years in prison and ordered to pay $429,300 in restitution; Leroy Donovan Combs, 74, of Fresno, was sentenced to three years and nine months in prison; Charles Wayne Uptergrove, 57, of Madera County, was sentenced to three years and three months in prison; and Ladonna Lee Moon, 55, of Texas, was sentenced to one year and nine months in prison. On February 29, 2016, Louis Calles, 67, of Fresno, was sentenced to 16 months in prison; and James Schwartz, 61, of Fresno, was sentenced to one year and a day in prison. On January 11, 2106, Oswald Georgner, was sentenced to 18 months in prison. (1:13-cr-362)
U.S. v. Ruiz — On February 3, 2016, Manuel Ruiz, 47, of Sacramento, was sentenced to 18 months in prison for making false claims for tax refunds on federal income tax returns for clients of his home-based tax preparation business. In total, between tax years 2009 and 2011, Ruiz made false claims on more than 180 returns that resulted in over $650,000 paid out by the IRS. After payments to clients, Ruiz retained at least $192,000 from the false claims. (2:14-cr-009)
U.S. v. Richards — On January 21, 2106, James Stewart Richards, 69, of West Sacramento, was sentenced to two years in prison for tax evasion. Richards is an attorney and a member of the bar in California and Hawaii. Between 1994 and 2003, Richards evaded paying over $170,000 in federal income taxes. He filed a false “Offer in Compromise” to the IRS that omitted bank accounts and six rental properties. He used a client trust account to hold his own assets. He also made false statements about his assets to a bankruptcy court and to the IRS. (2:10-cr-089)
More criminal tax investigations are underway.
[1] The charges in an indictment are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
Federal Jury Delivers Guilty Verdicts Against Four MS-13 Gang MembersRead the Press Release
CHARLOTTE, N.C. – A federal jury delivered guilty verdicts today against four members of the street gang “La Mara Salvatrucha,” or “MS-13,” who were on trial for participating in a racketeering conspiracy, announced Jill Westmoreland Rose, U.S. Attorney for the Western District of North Carolina. The convictions stem from the multiple acts of violence committed by the defendants for the benefit of the criminal enterprise, including murder and attempted murder. U.S. District Judge Robert J. Conrad Jr. presided over the trial.
Miguel Zelaya, 20, of Charlotte, Luis Ordonez-Vega, 36, of Concord, N.C., Jorge Sosa, 24, of Charlotte, and William Gavidia, 23, of Kannapolis, N.C. were each convicted of one count of conspiracy to participate in racketeering activity (RICO).
Zelaya was also convicted of murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Jose Orlando Ibarra.
Ordonez-Vega was also convicted of murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence resulting in the death of Noel Navarro Hernandez.
Sosa was convicted of attempted murder in aid of racketeering and use or carry of a firearm during and in relation to a crime of violence and possession of a firearm in furtherance of a crime of violence, that being attempted murder in aid of racketeering.
According to filed court documents, witness testimony, trial evidence and statements made in court:
From at least in or about 2009 to about May 2015, the four defendants along with 33 others named in a federal indictment, were members of the MS-13 gang, a criminal organization with over 6,000 members in the United States and 30,000 members internationally. MS-13 originated in Los Angeles, California, and has spread to states across the country, including in North Carolina. The gang’s members are mostly immigrants or descendants of immigrants from El Salvador and other Central and Latin American countries. In North Carolina, some of the active MS-13 members are divided into different groups, or “cliques,” which include the “Trece Locos Salvatrucha,” the “Hollywood Locos Salvatrucha,” the “Charlotte Locotes Salvatrucha,” the “Centrales Locos Salvatrucha,” and the “Coronados Little Cycos Salvatrucha,” among others. The different cliques work together to carry out criminal acts, to protect the interests of the criminal enterprise, and to assist each other in avoiding law enforcement detection.
MS-13 members adhere to a set of gang rules and pay dues which fund the gang’s criminal activities and support other gang members or their families in the U.S and abroad. Gang members are also expected to protect the name, reputation, and status of the gang and its members, and to punish through acts of violence and intimidation those who disrespect the gang. Some MS-13 members signify their affiliation with the gang by wearing blue, black and white color clothing and certain “Mara Salvatrucha,” or “MS-13” tattoos.
Members of MS-13 in Charlotte participated in multiple meetings at various times to discuss gang-related matters and to plan the commission of future crimes for the benefit of the gang. They were also responsible for numerous criminal acts including murder and attempted murder.
Zelaya, a/k/a “Most Wanted” and “Ne Ne”, is a member of the “Coronados Little Cycos Salvatrucha” clique. On December 18, 2013, Zelaya shot and killed Jose Orlando Ibarra, an associate of a rival gang, “The Latin Kings.” According to trial evidence and testimony, Zelaya admitted to law enforcement that he shot Jose Ibarra because Ibarra owed him money for a gun and because Ibarra and his brother, a Latin King member, had been looking for one of Zelaya’s “homies” with a shotgun.
Ordonez-Vega, a/k/a “Big Boy,” is a self-admitted member of MS-13 from Nassau County, New York, and a member of the “Brentwood Locos Salvatrucha” clique. Ordonez-Vega has “MS” tattooed across his stomach and “La Mara Salvatrucha” tattooed across his chest. On June 6, 2013, Ordonez-Vega shot and killed Noel Navarro Hernandez in a strip mall parking lot in Charlotte. Evidence presented at trial showed that Ordonez-Vega and other MS-13 members targeted Navarro because they believed that Navarro was a rival gang member because of the way he talked, wore red, and his haircut.
Sosa, a/k/a “Koki” and “Loco” is a member of the “Charlotte Locotes Salvatrucha” clique. According to trial evidence, Sosa has been involved in multiple gang-related incidents on numerous occasions. For example, on February 1, 2008, Sosa flashed MS-13 gang hand signs at a rival gang member’s mother and pointed a handgun at her while they were stopped in traffic. On October 15, 2011, Sosa warned a man who asked him to leave a party that he would return with other MS-13 gang members to shoot the victim. Also, on July 5, 2013, Sosa and other MS-13 members tried to break into a vehicle then attempted to run over with a car the officers who tried to arrest them. And on June 30, 2013, Sosa was involved in a gang-related shooting, when he and another person followed their victims in a neighborhood in Charlotte and opened fire with a high caliber rifle.
Gavidia, a/k/a “Duro,” is also a member of the “Coronados Little Cycos Salvatrucha” clique. According to evidence presented at trial and witness testimony, Gavidia has carried out criminal acts in support of the gang and has often fought rival gang members in clubs. For example, Gavidia admitted that he taxed drug dealers in MS-13 dominated clubs. Gavidia was also involved in a shooting on August 11, 2013, when another MS-13 gang member and indicted co-conspirator, Albert Vela-Garcia, shot a victim in the back following a bar fight started by Gavidia. Gavidia has also attacked a victim for falsely claiming to be a member of MS-13.
“A federal jury has rightfully convicted four gang members responsible for committing multiple acts of violence, including murder,” said U.S. Attorney Rose in making this announcement. “Today’s guilty verdicts underscore that even though gang membership may in some ways ‘protect’ gangsters from outsiders, it certainly won’t protect them from the vast reach of the U.S. Attorney’s Office and our law enforcement partners. Together, we will continue to identify and prosecute gang offenders who carry out violent acts for the benefit of their criminal enterprise,” said U.S. Attorney Rose.
The four defendants convicted today will remain in federal custody until their sentencing, which has not been set.
Thirty of the 37 MS-13 gang members previously charged with RICO conspiracy by federal criminal indictment in connection with this case have entered guilty pleas and are currently awaiting sentencing. They are: Carlos Almonte, Jose Danny Argueta, Juan Bergamasco-Suarez, Milton Chavarria, Raul Contreras, Luis Erazo, Marvin Fuentes-Canales, Luis Funes-Rivera, Jorge Garcia, Cesar Garcia-Perez, Saul Gavidia, Raul Guardado, Angel Hernandez, Jose Manuel Linares, Rene Lopez-Ventura, Jose Moran-Celis, Daniel Navarro, Jonathan Noble, Christian Pena, Jorge Perez, Victor Pineda, Rosendo Rivas, Fec Rodriguez-Vareal, Oscar Trejo, Jaime Turcios, Jose Vasquez, Marlon Vasquez-Maldonado, Albert Vela-Garcia, and Alexis Villalta-Morales. Four others remain fugitives. They are: Neris Gutierrez, Salvador Ruiz, Luis Villalta, and Miriam Barilles-Escamilla.
Following today’s guilty verdicts, U.S. Attorney Rose commended the Charlotte Division of the FBI, ICE’s Homeland Security Investigations, the Charlotte-Mecklenburg Police Department and thanked them for working together to investigate this case.
This prosecution is part of an extensive investigation by the Organized Crime Drug Enforcement Task Force (OCDETF). OCDETF is a joint federal, state and local cooperative approach to combat drug trafficking and is the nation’s primary tool for disrupting and dismantling major drug trafficking organizations, targeting national and regional level drug trafficking organizations and coordinating the necessary law enforcement entities and resources to disrupt or dismantle the targeted criminal organization and seize their assets.
Assistant U.S. Attorneys Elizabeth Greene and William Miller are in charge of the prosecution.
Federal Grand Jury IndictmentsRead the Press Release
Contact Person: Beth Drake (803) 929-3000
United States Attorney Bill Nettles stated today that a Federal Grand Jury in Greenville, South Carolina, returned Indictments against the following:
Seven Individuals Indicted for Conspiring to Alter Checks
Cornelius N. Mattress, age 42, of Pendleton, South Carolina; Karissa L. Miller, age 24, of Anderson, South Carolina; Sherry D. Lyons, age 43, of Abbeville, South Carolina; Erica R. Floyd, age 24, of Abbeville, South Carolina; Rosalynn D. Crawford, age 35, of Abbeville, South Carolina; Ruby A. Adams, age 53, of Anderson, South Carolina; and Stacy S. Paul, age 40, of Anderson, South Carolina were charged in a 1-count indictment with conspiracy, a violation of Title 18, United States Code, Section 371. The maximum penalty each defendant could receive is 5 years imprisonment and a maximum fine of $250,000. The case was investigated by agents of the United States Postal Inspection Service and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution.Greenville Resident Indicted on Child Pornography
Richard Wallace Heald, III, age 25, of Greenville, South Carolina, was charged in a 2-count indictment. Richard Wallace Heald, III, was charged with Possession of Child Pornography, a violation of Title 18, United States Code, Section 2252A(a)(5)(B) and Receiving or Distribution of Child Pornography, a violation of Title 18, United States Code, Section 2252(a)(2). The maximum penalty Heald could receive is 20 years imprisonment and a maximum fine of $250,000. The case was investigated by U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI) agents and is assigned to Assistant United States Attorney William J. Watkins, Jr., of the Greenville office for prosecution. This case is being brought as part of Project Safe Childhood, a nationwide initiative designed to protect children from online exploitation and abuse. Led by the United States Attorneys Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as identify and rescue victims. For more information, please visit www.projectsafechildhood.gov.Greenwood Man Indicted for Delay of Mail by a Postal Employee
Stephen J. Ritchie, Jr., age 32, of Greenwood, South Carolina, was charged in a single-count Indictment with delay of mail by a postal employee, a violation of Title 18, United States Code, Section 1703. The maximum penalty Ritchie could receive is five years imprisonment and a fine of $250,000.00. The case was investigated by agents of the United States Postal Service, Office of Inspector General, and is assigned to Assistant United States Attorney David C. Stephens of the Greenville office for prosecution.The United States Attorney stated that all charges in these Indictments are merely accusations and that all defendants are presumed innocent until and unless proven guilty.
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Farmington Woman Pleads Guilty to Distributing Child PornographyRead the Press Release
ALBUQUERQUE – Tristalyn Valencia, 29, of Farmington, N.M., entered a guilty plea today in federal court in Albuquerque, N.M., to a distribution of child pornography charge. Under the terms of the plea agreement, Valencia will be sentenced to a prison term within the range of ten to 15 years followed by a term of supervised release to be determined by the court. Valencia will be required to register as a sex offender upon her release from prison.
The guilty plea was announced by U.S. Attorney Damon P. Martinez, 11th Judicial District Attorney Robert P. “Rick” Tedrow, Special Agent in Charge Waldemar Rodriguez of Homeland Security Investigations (HSI) in El Paso, Tex., and San Juan County Sheriff Ken Christesen.
Valencia was arrested on Dec. 24, 2015, on an indictment charging her with nine counts of producing visual depictions of a minor engaged in sexually explicit conduct. According to the indictment, Valencia committed the crimes between May 2012 and Aug. 2012 in San Juan County, N.M.
During today’s proceedings, Valencia pled guilty to a felony information charging her with distribution of child pornography. In entering the guilty plea, Valencia admitted that from June 1, 2012 through June 30, 2012, she distributed nine images containing child pornography. Valencia admitted that each image depicted the same victim, who was under the age of 12 years, engaged in sexually explicit conduct. Some of the images depicted the victim engaged in sexually explicit conduct with an adult male.
This case was investigated by the Albuquerque and Phoenix offices of HSI and the San Juan County Sheriff’s Office with assistance from the 11th Judicial District Attorney’s Office in Farmington.
Assistant U.S. Attorney Sarah Mease is prosecuting the case as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice (DOJ) to combat the growing epidemic of child sexual exploitation and abuse. Led by United States Attorneys’ Offices and DOJ’s Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit http://www.justice.gov/psc/.
Essex County, New Jersey, Woman Sentenced to 21 Months in Prison for Role in Stolen Identity Refund Fraud SchemeRead the Press Release
TRENTON, N.J. – An Essex County, New Jersey, woman was sentenced today to 21 months in prison for conspiring to obtain more than $1 million through fraudulently generated refund checks issued by the U.S. Treasury, U.S. Attorney Paul J. Fishman announced.
Marie Poitevien, 54, of Orange, New Jersey, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging her with conspiring to steal government funds. Judge Thompson imposed the sentence today in Trenton federal court.
Stolen Identity Refund Fraud (SIRF) is a common type of fraud committed against the United States government that involves the use of stolen identities to commit tax refund fraud. SIRF schemes generally share a number of hallmarks:
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SIRF perpetrators obtain personal identifying information, including Social Security numbers and dates of birth, from unwitting individuals.
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SIRF perpetrators complete Form 1040 tax returns using the fraudulently obtained information and falsifying wages earned, taxes withheld, and other data, always ensuring that the fraudulent tax return generates a refund.
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They direct the U.S. Treasury Department to mail refund checks to locations that the perpetrators control or can access.
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With the fraudulently obtained refund checks in hand, SIRF perpetrators generate cash proceeds by depositing the checks into bank accounts that they control.
According to documents filed in this case and statements made in court:
From October 2009 through June 2013, Poitevien participated in a scheme in which her conspirators made fraudulent tax refund applications and had the U.S. Treasury send the refund checks to Poitevien’s residence. Poitevien then negotiated the checks by depositing them into her personal bank account and withdrawing the funds. Poitevien admitted cashing 298 tax refund checks, made payable to 139 different victims and totaling $1,101,689.
In addition to the prison term, Judge Thompson sentenced Poitevien to two years of supervised release.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s sentence.
The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Linda Foster Esq. Assistant Federal Public Defender, Trenton
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Durant Woman Sentenced to 18 Months for Embezzlement from Indian Tribal OrganizationRead the Press Release
MUSKOGEE, OKLAHOMA - The United States Attorney’s Office for the Eastern District of Oklahoma, announced that CARMA LYNN ELLIOTT, age 45, of Durant, Oklahoma, was sentenced to 18 months imprisonment, followed by 36 months of supervised release for EMBEZZLEMENT FROM INDIAN TRIBAL ORGANIZATIONS, in violation of Title 18, United States Code, Section 1163.
The charges arose from an investigation by the Choctaw Nation Tribal Police and the Federal Bureau of Investigation.
The Information filed in October, 2015, alleged that from on or about March 26, 2005 and continuing through April 2, 2011, in the Eastern District of Oklahoma, the defendant with intent to convert them to her use, did knowingly retain $585,397.15 of moneys, funds and credits belonging to the Choctaw Nation of Oklahoma, a tribal organization.
The Honorable James H. Payne, District Judge in the United States District Court for the Eastern District of Oklahoma, presided over the hearing.
Assistant United States Attorney Dean Burris represented the United States.
Dover Insurance Broker Charged with Tax FraudRead the Press Release
BOSTON – A Dover, Mass. insurance broker was arrested today in connection with filing fraudulent personal tax returns.
Anthony J. May, 61, was indicted on two counts of filing false tax returns for tax years 2008 and 2009.
According to the indictment, May owned and operated Clients First Financial LLC, a business selling life insurance products, and Advantage Life Settlements, LLC, which served as a broker for individuals to sell their own life insurance policies to third party investors. May allegedly operated his businesses out of an office suite in Hingham where he also rented space to other independent insurance agents. As alleged in the indictment, May failed to report substantial amounts of the gross receipts he received from insurance commissions, life settlement broker fees and business rental income in his 2008 and 2009 tax returns.
The charging statute provides for a sentence of no greater than three years in prison, one year of supervised release and a fine of $250,000. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district judge based on the U.S. Sentencing Guidelines and other sentencing factors.
United States Attorney Carmen M. Ortiz and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit.
The details contained in the indictment are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Dominican Man Pleads Guilty to Illegally Reentering the United States After A Previous Deportation, and Other ChargesRead the Press Release
CONCORD, NEW HAMPSHIRE –United States Attorney Emily Gray Rice announced that Gerpis Pena, of the Dominican Republic, pleaded guilty to a three-count indictment charging him with illegally re-entering the United States after having been previously deported, misrepresenting a social security number, and falsely claiming to be a U.S. citizen.
On November 5, 2015, Gerpis Pena appeared at the Manchester office of the Department of Motor Vehicles and attempted to obtain a New Hampshire driver’s license. Gerpis had in his possession a birth certificate purportedly issued in Puerto Rico, a social security card, and a previously-issued New Hampshire driver’s license. He had completed the forms necessary for issuance of a license in the name of the individual named in the identifying documents, including the social security number listed on the card he possessed, when he was approached by the New Hampshire State Police.
A New Hampshire State Trooper questioned Pena as to his identity. Pena initially claimed to be a United States Citizen, born in Puerto Rico, and had filled out and signed a renewal application on which he had checked “yes” to the question “Are you a United States citizen?” The Trooper contacted Immigration and Customs Enforcement – Enforcement and Removal Operations (ICE-ERO) for assistance in identifying the defendant.
ICE-ERO Deportation Officers arrived at the DMV and, using a mobile fingerprinting kit, submitted the defendant’s fingerprints for comparison to databases of known fingerprints. The fingerprint impressions were a match to those previously taken from the defendant.
Pena will be sentenced at 10:00 AM on August 1, 2016, and will be deported after serving his sentence.
The case was investigated by the U.S. Department of Homeland Security, Bureau of Immigration and Customs Enforcement and the New Hampshire State Police. Assistant U.S. Attorney Alfred Rubega is prosecuting this case.
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Dallas Doctor and Three Dallas-Area Home Health Agency Owners Convicted for Running Large-Scale, Sophisticated Health Care Fraud SchemeRead the Press Release
DALLAS – Following a six-week-long trial before U.S. District Judge Sam A. Lindsay and less than two days of deliberation, this afternoon a federal jury convicted a Dallas physician and three owners of home health agencies on various felony offenses, including conspiracy to commit health care fraud, stemming from their participation in a nearly $375 million health care fraud scheme involving fraudulent claims for home health services, announced U.S. Attorney John Parker of the Northern District of Texas.
Jacques Roy, M.D., 58, of Rockwall, Texas; Cynthia Stiger, 53, of Dallas; Wilbert James Veasey, Jr., 64, of Dallas; and Charity Eleda, R.N., 55, of Rowlett, Texas, were each convicted on one count of conspiracy to commit health care fraud. In addition, Roy was convicted on eight, Veasey on three and Eleda on four counts of health care fraud. Roy was also convicted on two counts of making a false statement relating to healthcare matters and one count of obstruction of justice. Eleda was also convicted on three counts of making false statements for use in determining rights of benefit and payment by Medicare.
“This office will continue to use the most sophisticated techniques available to aggressively prosecute those who, through their fraud, drive up the costs of health care to consumers and tax payers alike,” said U.S. Attorney Parker. “I applaud the tremendous cooperation among the investigative agencies that brought us to this point.”
Each conspiracy and health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The obstruction of justice count and each false statement count carry a maximum statutory penalty of five years in federal prison and a $250,000 fine. Sentencings are set for this fall.
Dr. Roy, who has been in federal custody since his arrest on February 28, 2012, on an indictment that was announced at a press conference in Dallas shortly after it was unsealed that same day, owned/operated Medistat Group Associates, P.A., an association of health care providers who provided home health certifications and performed patient home visits. Stiger and Veasey, who owned/operated Apple of Your Eye Healthcare Services, Inc., and Eleda, who owned/operated Charry Home Care Services, Inc., were also arrested on charges in that indictment, but were released on bond.
Three other defendants charged in the case, Cyprian Akamnonu and his registered nurse wife, Patricia Akamnonu, both of Cedar Hill, Texas, and Teri Sivils, of Midlothian, Texas, each pleaded guilty before trial to one count of conspiracy to commit health care fraud. Cyprian and Patricia Akamnonu, who owned Ultimate Care Home Health Services, Inc., are each currently serving a ten-year federal prison sentence. They were also ordered to pay $25 million in restitution. Sivils, who was the office manager at Medistat, pleaded guilty in April 2015, and is scheduled to be sentenced in June 2016.
The government presented evidence at trial that Dr. Roy, Stiger, Veasey and Eleda engaged in a large-scale, sophisticated health care fraud scheme in which they conspired together and with others to defraud Medicare and Medicaid through companies they owned/controlled: Medistat Group Associates, P.A., Apple of Your Eye Health Care Services, Inc., Ultimate Care Home Health Services and Charry Home Care Services.
As part of the conspiracy, Stiger, Veasey and Eleda, along with others, improperly recruited individuals with Medicare coverage to sign up for Medicare home health care services. Eleda recruited patients from The Bridge homeless shelter in Dallas, sometimes paying recruiters $50 per beneficiary they found and directed to her vehicle parked outside the shelter’s gates. Eleda and other nurses would falsify medical documents to make it appear as though those beneficiaries qualified for home health care services that were not medically necessary. Eleda and the nurses prepared Plans of Care (POC), also known as 485’s, which were not medically necessary, and these POCs were delivered to Dr. Roy or another physician working under his direction at Medistat.
Dr. Roy instructed his staff to certify these POCs, which indicated to Medicare and Medicaid that a doctor, typically Dr. Roy, had reviewed the treatment plan and deemed it medically necessary. That certifying doctor, typically Dr. Roy, certified that the patient required home health services, which were only permitted to be provided to those individuals who were homebound and required, among other things, skilled nursing. This process was repeated for thousands of POCs, and, in fact, Medistat’s office included a “485 Department,” essentially a “boiler room” to affix fraudulent signatures and certifications.
Once an individual was certified for home health care services, Eleda, nurses who worked for Stiger and Veasey, and other nurses falsified visit notes to make it appear as though skilled nursing services were being provided and continued to be necessary. Dr. Roy would also visit the patients, perform unnecessary home visits, and then order unnecessary medical services for the recruited beneficiaries. Then, at Dr. Roy’s instruction, Medistat employees would submit fraudulent claims to Medicare for the certification and recertification of unnecessary home health care services and other unnecessary medical services.
The government presented further evidence at trial that the scope of Dr. Roy’s fraud was massive; Medistat processed and approved POCs for 11,000 unique Medicare beneficiaries from more than 500 different home health agencies. Dr. Roy entered into formal and informal fraudulent arrangements with Apple, Charry, Ultimate and other home health agencies to ensure his fraudulent business model worked and that he maintained a steady stream of Medicare beneficiaries.
Regarding Dr. Roy’s conviction for obstruction of justice, the government presented evidence that when the Centers for Medicare and Medicaid Services (CMS) suspended Dr. Roy and Medistat from receiving Medicare payments after June 2, 2011, because of suspected fraud, Dr. Roy sought an “end-run” around the suspension through the use of another company, Medcare House Calls. Dr. Roy directed the medical providers he employed to be re-credentialed and to bill Medicare under Medcare House Calls, instead of Medistat. Nonetheless, the money that Medicare paid was circumvented back to Medistat and Dr. Roy.
The case was investigated by the Federal Bureau of Investigation, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG), and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU) and was brought as part of the Medicare Fraud Strike Force supervised by the Criminal Division Fraud Section and the U.S. Attorney’s Office for the Northern District of Texas.
Assistant U.S. Attorney P.J. Meitl, Special Assistant U.S. Attorney Nicole Dana and Criminal Chief Assistant U.S. Attorney Chad Meacham prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for more than $7 billion. In addition, HHS CMS, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), please visit: www.stopmedicarefraud.gov.
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Colombian National Sentenced for Immigration OffenseRead the Press Release
U.S. Attorney Kenneth A. Polite announced that MARCELINO OLAVE-GRANJA, age 46, a citizen of Colombia, was sentenced today after previously pleading guilty to a one-count indictment for illegal reentry of a removed alien.
U.S. District Court Judge Susie Morgan sentenced OLAVE-GRANJA to 10 months imprisonment, followed by one year of supervised release, and a $100 special assessment fee. OLAVE-GRANJA will be surrendered to the custody of the U.S. Immigration and Customs Enforcement for removal proceedings.
According to court documents, on June 11, 2015, OLAVE-GRANJA was found in the United States after having been previously deported from the United States on June 9, 1998.
U.S. Attorney Polite praised the work of United States Customs and Border Protection agents in investigating this matter. Assistant United States Attorney Jon Maestri was in charge of the prosecution.
Cleveland Heights woman charged with welfare fraudRead the Press Release
Loretta Irby, 63, of Cleveland Heights, Ohio, has been charged with theft of government property, said Carole S. Rendon, Acting United States Attorney for the Northern District of Ohio.
Irby stole approximately $33,963 in Supplemental Security Income benefits to which she was not entitled. Irby defrauded the Social Security Administration by concealing her true marital status and living arrangements with her husband. The concealment deprived SSA of the ability to properly administer the SSI program, and caused SSA to pay her benefits when she was not eligible for those benefits. Irby concealed these material facts knowing that it would affect her right to SSI benefits.The scheme lasted approximately 10 years, beginning in or around July 2005, through in or around April 2015, according to court documents.
Special Assistant United States Attorney Lisa J. Sanniti is prosecuting the case following an investigation by the Social Security Administration Office of the Inspector General.
If convicted, the court will determine the defendant’s sentence after a review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum. In most cases, it will be less than the maximum.
An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government's burden to prove guilt beyond a reasonable doubt.
Charlton Man Pleads Guilty to Child ExploitationRead the Press Release
BOSTON – A Charlton man pleaded guilty today in U.S. District Court in Worcester in connection with soliciting hundreds of teenage girls on several social media platforms.
Matthew Clem, 31, pleaded guilty to an Information charging him with three counts of producing child pornography. U.S. District Court Judge Hillman scheduled sentencing for July 13, 2016. Clem also faces state child rape charges in the Worcester Superior Court.
Clem posed as a 15-16 year old boy on several social media platforms in order to meet teenage girls. After chatting with them, Clem proposed that they meet his 19 or 20 year old “cousin,” who Clem claimed was returning from active military duty. The “cousin,” however, was Clem himself who had never served in the military. Evidence on Clem’s cell phone revealed that he had solicited over 1,000 potential victims.
Clem admitted during the plea hearing that in October 2014 he requested and obtained nude photos of a teenage female victim through Kik Messenger, a web-based messaging service. Via text message, Clem specified poses and sexual acts for the victim to photograph and send to him.
From September 2011 to May 2012, Clem video-chatted with another female teenage victim over Skype, a web-based video messaging service. During the video chats, Clem had the victim remove her clothes and conduct sexual acts. Clem also met with the victim and engaged in sexual intercourse with her.
Clem also admitted to communicating with a third teenage victim through Kik Messenger in the spring and fall of 2014. Clem exchanged sexually graphic text messages and images with the teenager and met her on multiple occasions to engage in sexual intercourse.
The charging statute provides a mandatory minimum sentence of 15 years and no greater than 30 years in prison, a minimum of five years and up to a lifetime of supervised release and a fine of $250,000 on each count. Pursuant to a plea agreement, Clem will be sentenced to a minimum of 15 years and no greater than 21 years in prison if the Court accepts the agreement. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Worcester District Attorney Joseph D. Early, Jr.; Gregory K. Null, Special Agent in Charge of the U.S. Department of Homeland Security, Office of Inspector General, Office of Investigations; Colonel Richard D. McKeon, Superintendent of the Massachusetts State Police; and Worcester Police Chief Gary Gemme, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark Grady of Ortiz’s Worcester Branch Office.
The case is brought as part of Project Safe Childhood. In 2006, the Department of Justice created Project Safe Childhood, a nationwide initiative designed to protect children from exploitation and abuse. Led by the U.S. Attorneys’ Offices and the DOJ’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend, and prosecute individuals who exploit children, as well as identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov/.
Baltimore Felon Sentenced to 17 Years in Prison for Federal Gun Charge and RobberyRead the Press Release
Baltimore, Maryland – U.S. District Judge Richard D. Bennett sentenced Alfred Patterson, age 50, of Baltimore, Maryland, today to 17 years in prison, followed by five years of supervised release, for robbing a drug dealer and using a gun during the robbery. A federal jury convicted Patterson on February 5, 2016.
The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge William P. McMullan of the Bureau of Alcohol, Tobacco, Firearms and Explosives - Baltimore Field Division; Baltimore Police Commissioner Kevin Davis; and Baltimore City State’s Attorney Marilyn Mosby.
According to the evidence presented at his five day trial, on January 28, 2015, Baltimore City Police officers were conducting surveillance in the 3600 and 3700 blocks of Beehler Avenue, a known high-crime area. The officers saw a vehicle pull up and an individual got into the rear of the car, leaving the door open. With an unobstructed view into the car, the officers saw a brief struggle between the individual, the driver of the car, and Patterson, who was in the passenger seat. The officers saw Patterson pull out a handgun and point it at the individual, who jumped out of the car and ran away. The car then drove off at high speed.
Alerted by the surveillance team, two officers pulled the car over several blocks away and removed the driver and Patterson from the car. A loaded .38 caliber revolver and two ziplock bags of heroin were on the passenger seat where Patterson had been sitting. The officers recovered the gun and the heroin, and arrested Patterson and the driver.
United States Attorney Rod J. Rosenstein commended the ATF, Baltimore Police Department, and Baltimore City State’s Attorney’s Office for their work in the investigation and thanked the Drug Enforcement Administration for its assistance. Mr. Rosenstein thanked Assistant United States Attorney Aaron S. J. Zelinsky and Special Assistant U.S. Attorney Lauren E. Perry, who prosecuted the case.
Autry State Prison Inmate Pleads Guilty to Laundering $1 Million from PrisonRead the Press Release
Reginald Perkins, who admitted he laundered approximately $1 million of illegal proceeds from inside Autry State Prison, has pleaded guilty to a charge of conspiring to launder money as part of a wide-ranging federal investigation of criminal activity and corruption inside Georgia State prisons.
“This case re-emphasizes the widespread and corrosive effects that cell phones have in prisons,” said U. S. Attorney John Horn. “A prison is the last place where criminal activity like this should be occurring, and the fact that the amount of money laundered through this inmate’s conduct totals $1 million is mind-boggling.”
“The level of victimization that this Georgia Department of Corrections inmate could cause is astonishing and disheartening. Prison can be a mix of punishment or rehabilitation for the many inmates living within its walls. For Mr. Perkins, his prison experience clearly lacks any signs of rehabilitation and, because of his continued and unrepentant criminal conduct, it will now be longer,” said J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office.
According to U.S. Attorney Horn, the charges and other information presented in court: Perkins laundered fraud proceeds while incarcerated in Jimmy Autry State Prison (“Autry”). Autry is a Georgia Department of Correction (“GA DOC”) medium security prison located in Pelham, Georgia, that houses approximately 1,700 adult male inmates.
While Perkins was an inmate at Autry, GA DOC inmates regularly obtained cellular telephones. For example, from 2014 to 2015, GA DOC officials seized more than 23,500 cellular telephones from inside Georgia state prisons. Many of the seized cellular telephones possessed Internet capabilities and the latest smartphone features. The possession of cellular telephones by GA DOC inmates creates a significant risk to prison security and to public safety, as GA DOC inmates used contraband cellular telephones to commit various criminal acts while incarcerated.
Inmates used contraband cellular telephones from inside Autry to access Internet websites to identify the names, addresses, and telephone numbers of potential fraud victims. Using the cellular telephones, inmates called the victims whose names and numbers had been obtained. During these calls, the inmates made certain false representations to the victims, including: (a) that the inmates were law enforcement officials; (b) that the potential victims had unlawfully failed to appear for jury duty; (c) that because the potential victims had failed to appear for jury duty, warrants had been issued for the victims’ arrest; and (d) that the potential victims had a choice of being arrested on the warrants or pay fines to have the arrest warrants dismissed. To make the calls seem real, the inmates created fictitious voicemail greetings on their contraband cellular telephones, identifying themselves as members of legitimate law enforcement agencies.
For those victims who wanted to pay a fine, the inmates instructed them to purchase pre-paid cash cards and provide the account number of the cash card or wire money directly into a pre-paid debit card account held by the inmates. Based on these false representations, the victims electronically transferred money to the inmates because they believed that the funds would be used to pay the fine for failing to appear for jury duty and would result in the dismissal of the arrest warrant.
Perkins took the account number of the pre-paid cash card and contacted his co-conspirators, who were not incarcerated, to have those individuals transfer the money from the cash card purchased by the victims to a pre-paid debit card possessed by the co-conspirators. Next, the co-conspirators withdrew the victim’s money, which had been transferred to the pre-paid debit card they controlled, via an automated teller machine or at a retail store. Typically, the co-conspirators then laundered the stolen money by purchasing a new cash card so that the victims’ funds could be transferred back to the inmates. Perkins worked with about 100 individuals outside of the prison and laundered approximately $1 million in proceeds from fraud and other illegal schemes.
Reginald Perkins, 35, of Atlanta, Georgia pleaded guilty to one count of money laundering in a hearing before U.S. District Judge Steve C. Jones. Sentencing is scheduled for June 20, 2016.
This case is being investigated by the Federal Bureau of Investigation. Assistant United States Attorney Christopher J. Huber is prosecuting the case.
For further information please contact the U.S. Attorney’s Public Affairs Office at [email protected] or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is http://www.justice.gov/usao-ndga.
Albuquerque Woman Sentenced for Federal Methamphetamine Trafficking ConvictionRead the Press Release
ALBUQUERQUE – Reyes Tijerina, 35, of Albuquerque, N.M., was sentenced late yesterday afternoon in federal court to 60 months in federal prison followed by three years of supervised release for her methamphetamine trafficking conviction.
Tijerina was arrested on Jan. 14, 2015, on a two-count indictment charging her with distributing methamphetamine on Sept. 10, 2014 and Sept. 24, 2014, in Bernalillo County, N.M.
On Oct. 5, 2015, Tijerina pled guilty to one count of distribution of methamphetamine. In entering the guilty plea, Tijerina admitted that on Sept. 10, 2014, she sold methamphetamine to an undercover agent.
This case was investigated by the Albuquerque office of the DEA and was prosecuted by Assistant U.S. Attorney Jacob Wishard.
Appeals Court Agrees Department of Agriculture Did Not Act Contrary to LawRead the Press Release
United States Attorney Randolph J. Seiler announced that a 2011 wetland determination made by the United States Department of Agriculture (USDA), Natural Resources Conservation Service (NRCS) was affirmed by the Eighth Circuit Court of Appeals this week.
Arlen and Cindy Foster (Fosters) challenged a USDA determination that a portion of their farmland was a wetland within the meaning of federal statutes and regulations. In 2014, District Court Judge Karen Schreier granted summary judgment in favor of the USDA after concluding the agency’s decision was not arbitrary, capricious, or contrary to the law. The appeals court agreed.
In 1985, Congress enacted what are commonly referred to as “Swampbuster” provisions in order to combat the disappearance of wetlands through conversions into crop lands. The Swampbuster provisions provide that agricultural production on a converted wetland would cause a farmer to forfeit eligibility for a number of federal farm-assistance programs.
Under Swampbuster provisions, the NRCS is charged with determining and certifying wetlands. In order for a site to be classified as a wetland, NRCS must establish that three criteria have been met: (1) that the land has a predominance of hydric soils; (2) the presence of wetland hydrology (defined as sufficient surface water or groundwater at a frequency and duration sufficient to support a prevalence of hydrophyic vegetation); and (3) that under normal circumstances the land supports a prevalence of hydrophyic vegetation.
The NRCS determined that 0.8 acres of the Fosters’ property was a wetland. The Fosters appealed the wetland status to the National Appeals Division (NAD), an agency independent from the USDA, which affirmed the NRCS determination. The Fosters then filed a lawsuit in District Court challenging the basis for the NRCS's determination of the wetland status as being arbitrary, capricious, or otherwise not in accordance with the law.
The Fosters specifically challenged the NRCS’s use of aerial photography and a wetland reference site, but the District Court concluded, and the appeals court agreed, that the NRCS properly followed its wetland determination procedures and criteria established to make wetland determinations. Ultimately, the Courts held that the agency made a rational connection between the facts and the wetland determination, and thus, the NRCS did not act arbitrarily or capriciously, or contrary to the law.
The agency determination was defended by Assistant United States Attorney Cheryl Schrempp DuPris and the USDA, Office of the General Counsel.
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A Canadian Citizen Sentenced on Charges of Smuggling Turtles from the United StatesRead the Press Release
A Canadian citizen was sentenced today to 57 months in prison as a result of pleading guilty to six counts of smuggling turtles, some of which were endangered, from the United States in violation of the Convention on International Trade in Endangered Species of Wild Fauna and Flora, U.S. Attorney Barbara L. McQuade announced.
McQuade was joined in the announcement by Special Agent in Charge Jill Birchell of the U.S. Fish and Wildlife Service.
Kai Xu, 27, of Windsor, Ontario was sentenced today before United States District Judge John Corbett O’Meara in Ann Arbor. As part of his sentence, Judge O’Meara ordered to pay over $17,000 in restitution for the care of the turtles.
At the time of the plea hearing, Xu admitted that on six occasions in 2014 he entered the United States from Canada and traveled to Fed Ex and UPS facilities in the metro-Detroit area, where he retrieved packages that contained a variety of different species of live turtles. Xu then illegally smuggled the turtles out of the country using three methods. On some instances, Xu repackaged the turtles and shipped them directly to China, concealing the wildlife in snow boots. On one occasion, Xu taped the live turtles to his legs and groin (a total of 51 live turtles) and returned to Canada, smuggling the turtles in his pants to conceal them from customs officials. Finally, on the day of Xu’s arrest, he packaged over 1000 turtles into suitcases that he sent with a runner he had hired to fly directly from Detroit to Shanghai. The turtles were recovered by U.S. Fish and Wildlife special agents. They had been packaged into boots and cereal boxes and concealed within luggage.
Special Agent Birchell stated, “One of our highest priorities is to investigate individuals and companies who are involved in the unlawful commercial trafficking and smuggling of our Nation's fish and wildlife. This investigation demonstrates our commitment to pursuing those who decimate wildlife populations for their unfettered greed, depriving future generations of enjoying these species in their native habitats.”
The case was investigated by the U.S. Fish and Wildlife Service and the Wildlife Enforcement Directorate within Environment and Climate Change Canada. U.S. Customs and Border Protection and Homeland Security Investigations also assisted with the investigation.
7th Street Gang Member Sentenced for Rico ConspiracyRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
Buffalo, N.Y. -- U.S. Attorney William J. Hochul, Jr. announced today that 7th Street Gang member Luis Medina, 24, who pleaded guilty to Racketeering Influenced Corrupt Organizations (RICO) conspiracy, was sentenced to 210 months in prison by U.S. District Judge Richard J. Arcara.Assistant U.S. Attorney Joseph M. Tripi, who handled the case, stated that Luis Medina, as a member of the 7th Street Gang, sold heroin and possessed firearms. In addition, on April 16, 2006, Medina shot a rival 10th Street Gang member with a .22 caliber firearm. Furthermore, on June 13, 2009, while being held in the Erie County Holding Center, Medina learned that his cousin Christian Portes was killed by the 10th Gang members. Medina made a phone call from the holding center requesting that fellow 7th Street Gang members kill 10th Street Gang members in retaliation for the murder of his cousin. After being released on November 7, 2009, Medina himself fired shots at 10th Gang members.
A total of 18 defendants have been charged in this case. To date, 17 have been convicted.
The sentencing is the culmination of an investigation on the part of Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, the New York State Police, under the direction of Major Michael Cerretto, the Buffalo Police Department, under the direction of Commissioner Daniel Derenda, and the Bureau of Alcohol, Tobacco, Firearms and Explosives, under the direction of Special Agent in Charge Delano A. Reid.
12 April 2016
Unlicensed Physician Pleads Guilty to Role in Detroit-Based $6.2 Million Medicare Fraud SchemeRead the Press Release
An Ohio man pleaded guilty to fraud charges for his role in a scheme to defraud Medicare out of approximately $6.2 million while he acted as an unlicensed physician at a Detroit in-home physician services company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Barbara L. McQuade of the Eastern District of Michigan, Special Agent in Charge David P. Gelios of the FBI Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.
Cecil Alexander Kent Jr., 58, of Eastlake, Ohio, pleaded guilty yesterday before U.S. District Judge John Corbett O’Meara of the Eastern District of Michigan to one count of conspiracy to commit health care fraud, two counts of health care fraud and five counts of making false statements relating to health care matters. Sentencing is scheduled for Aug. 16, 2016, before Judge O’Meara.
Kent admitted that while he was employed at B&M Visiting Doctors PLC (B&M) and while he was unlicensed, he saw patients and falsified related patient records, including medical documents and billing documents, all under the name of a licensed medical doctor. He admitted that among those documents falsified were prescriptions for controlled substances, such as Fentanyl, that he personally wrote using the name and U.S. Drug Enforcement Administration (DEA) number of a licensed physician. Kent knew that Medicare did not pay for patient visits performed by unlicensed individuals, but that such claims were nonetheless submitted to Medicare through B&M, he admitted.
Charles McRae, 61, an unlicensed physician and part owner of B&M, and Alvin Williams, 65, an unlicensed physician, both of Detroit, were charged in the same indictment as Kent and pleaded guilty for their participation in this scheme to defraud. McRae and Williams will be sentenced in July 2016.
The FBI and HHS-OIG investigated this case, which was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Michigan. Trial Attorney Melissa Aoyagi and Assistant Chief Robert Zink of the Criminal Division’s Fraud Section prosecuted the case.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged over 2,300 defendants who collectively have billed the Medicare program for over $7 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to www.stopmedicarefraud.gov.
U.S. Attorney Vance Says White House Fair Chance Pledge Should Have Sound Footing in Birmingham AreaRead the Press Release
BIRMINGHAM – As the White House and U.S. Attorney General Loretta Lynch on Monday hosted 19 American companies committed to eliminating hiring barriers for people with criminal records, U.S. Attorney Joyce White Vance said she is proud that government and corporate leaders in the Birmingham area already are working to provide a pathway for a second chance to the thousands of people coming out of Alabama prisons each year.
The City of Birmingham in February became the first city in Alabama to “ban the box” on its hiring applications in order to give people with a criminal history a fair shot to compete for jobs and a chance to be judged on their qualifications. In November, Vance met with a group of Birmingham Business Alliance investors to discuss the importance of employment on the successful return to society of people leaving prison. These actions are right in step with the Fair Chance Business Pledge launched Monday by the Obama Administration, Vance said.
According to the White House, the pledge represents a call-to-action for all members of the private sector to improve their communities by eliminating barriers for those with a criminal record and creating a pathway for a second chance.
Many employers require job applicants to disclose conviction and arrest history on the initial job application. Often, when that disclosure is made, the applicant is immediately removed from further consideration for employment. The national “Ban the Box” campaign encourages governments and private employers to delay consideration of offense history within the hiring process.
There is strong data showing that ex-offenders who find employment are half as likely to reoffend as those who struggle to find a job, Vance said.
“For employers who believe it is unsafe to hire former inmates, there is also ample data showing that employed ex-offenders have better retention rates, better performance metrics, and pose no greater risk within the workplace than those without a conviction history,” she said.
In Alabama, more than 30,000 people are in prison or jail. The vast majority of those inmates – about 95 percent – will eventually return to the community. In Jefferson County alone, about 2,000 people return from prison annually.
“People who have completed a prison sentence for a crime they committed, should have a fair chance at success after paying their debt to society,” Vance said. “When they cannot get a driver's license or a job, they and the communities they live in are doomed to a cycle of repeated crime. Strong data shows that removing barriers to success and making it possible to find housing and transportation, and to train for and find employment reduces the likelihood that ex-offenders will commit new crimes and return to prison. In other words, we can make communities safer, families stronger and prisons less crowded and expensive for the taxpayer,” she said.
The U.S. Attorney’s Office will sponsor several educational events the week of April 25-29, which the Department of Justice has designated as National Reentry Week. Events in Birmingham will include a reentry simulation on Tuesday, April 26, and a roundtable conversation with ex-offenders at The Dannon Project on Thursday, April 28.
The reentry simulation, which will be presented at the National Alumni House on the University of Alabama at Birmingham campus, is designed to present an understanding of the many day-to-day obstacles someone coming out of prison faces in seeking a job, housing, or transportation. The Dannon Project is a non-profit organization that provides services to people coming out of prison, including counseling and job training. It also works with employers to find appropriate job placements and provides support to both employer and employee to encourage success on the job.
Businesses interested in information about hiri wh_fair_chance_business_pledge.pdfng ex-offenders, or for information about the Reentry Week events, call Assistant U.S. Attorney Jeremy Sherer, the office’s reentry coordinator, at 205-244-2019.
U.S. Attorney Barry Grissom to Step DownRead the Press Release
KANSAS CITY, KAN. - Barry Grissom announced today that he will step down as U.S. Attorney for the District of Kansas effective April 15.
“Serving the American people and the citizens of Kansas is the best job in world,” Grissom said. “It has been an honor and a privilege to work with the attorneys and staff of the U.S. Attorney’s Office in the District of Kansas.”
U.S. Attorney General Loretta Lynch thanked Grissom for his service: “Since taking office in 2010, U.S. Attorney Barry Grissom has rendered exemplary service to the Department of Justice, the citizens of Kansas, and the American people,” Lynch said. “Throughout his tenure, Barry worked tirelessly to build new partnerships with state and local law enforcement; to strengthen relationships between police officers and the communities they serve; and to uphold the nation’s civil rights laws. From establishing an innovative working group on human trafficking to lending his sound advice as a member of the Attorney General’s Advisory Council, Barry has served with energy, with commitment, and with steadfast devotion to our highest ideals. Ultimately, Barry has helped to make his beloved state of Kansas – and the entire United States – a safer and more just place. I thank him for his outstanding contributions, and I wish him the very best in his next endeavor.”
First Assistant U.S. Attorney Tom Beall will serve as acting U.S. Attorney.
Grissom was nominated by President Barack Obama in April 2010 and confirmed by the U.S. Senate in August 2010. He served as a member of the U.S. Attorney General’s Advisory Committee, which provides advice and counsel to the U.S. Attorney General. He served on the Justice Department’s subcommittees focusing on civil rights, community issues, Native American issues, health care fraud, local government coordination and veterans’ rights.
As U.S. Attorney Grissom led an office of approximately 50 Assistant U.S. Attorneys and 50 support staff working in three offices located in Wichita, Topeka and Kansas City, Kan.
During his tenure, Grissom made civil rights enforcement and community outreach top priorities. Among other accomplishments, Grissom:
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Founded the Kansas Civil Rights Symposium, bringing law enforcement officers and civil rights advocates together from across Kansas together annually for a day-long conference.
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Promoted efforts to build better relationships between law enforcement agencies and the communities they serve.
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Founded the District’s first Human Trafficking Working Group. The group’s mission was to coordinate the work of local, state and federal law enforcement, as well as nonprofit agencies and victim service providers, to fight human trafficking.
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Established the District’s first criminal prosecutor position assigned to carry out the Justice Department’s Smart on Crime Initiative. Objectives included reducing penalties for low-level, non-violent drug offenders, as well as pursuing new and innovative ways to promote public safety.
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Directed the District’s Project Safe Neighborhood program, targeting for federal prosecution felons who unlawfully possessed firearms.
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Oversaw the District’s Project Safe Childhood program, targeting child sex offenders for long federal prison sentences.
Major cases during Grissom’s tenure included a federal racketeering case targeting gang members in Dodge City, the conviction and 20-year sentencing of a man who attempted to explode a bomb at an airport in Wichita, the prosecution and conviction of business owners who knowingly employed undocumented workers, and the prosecution of physicians and other health care providers who diverted prescription medications.
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Tulsa Man Charged with Money LaunderingRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that an Information was filed in the United States District Court for the Northern District of Oklahoma charging WAYNE SCOTT HARRINGTON, age 67, of Tulsa, Oklahoma with MONEY LAUNDERING, in violation of Title 18, United States Code, Section 1957. Money Laundering is punishable by up to 10 years imprisonment, a fine not to exceed $250,000.00 or twice the amount of the criminally derived property, 3 years of supervised release and a $100 special assessment.
The Information alleges that on or about June 5, 2012 HARRINGTON, a former dentist, laundered monies obtained from fraudulent billing of Medicaid and Medicare during his practice of dentistry.
The charges are a result of an investigation by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigative Services, Department of Defense – Office of Inspector General, U.S. Health and Human Services – Office of Inspector General, Drug Enforcement Administration and the Oklahoma Attorney General Medicaid Fraud Control Unit.
Assistant United States Attorney Melody Nelson and Assistant United States Attorney Edward Snow represent the United States.
“The above named individual has been charged with a federal crime or crimes. An Information does not constitute evidence of guilt. An Information is a method of bringing charges against the defendant. A defendant is presumed innocent of the charges and may not be found guilty unless evidence establishes guilt beyond a reasonable doubt. United States Sentencing Guidelines may be considered, upon conviction, by the sentencing court. Federal prison sentences are non-parolable.”
Supplemental Brief Filed in the Case of Zubik v. BurwellRead the Press Release
Attached please find a PDF version of the supplemental brief in Zubik v.Burwell that was filed April 12, 2016.
Sudanese Man Pleads Guilty in Manhattan Federal Court in Connection with Bank Fraud and Credit Card Fraud SchemesRead the Press Release
Preet Bharara, the United States Attorney for the Southern District of New York, and David Schnorbus, Special Agent-in-Charge of the New York Field Office of the United States Department of State, Diplomatic Security Service (“DOS-DSS”), announced today that ASHRAF LAKOU pled guilty to bank fraud, credit card fraud, passport fraud, and aggravated identity theft charges in connection with orchestrating a scheme to use stolen victim identification information to make fraudulent credit card purchases and to defraud financial institutions by depositing counterfeit checks into accounts controlled by LAKOU and his co-conspirators. Through these schemes, LAKOU and his co-conspirators attempted to defraud individuals, businesses and financial institutions out of more than $1.5 million. LAKOU pled guilty before United States Magistrate Judge James L. Cott.
According to the criminal Complaint, Indictment, and other documents filed in Manhattan federal court, as well as statements made at related court proceedings:
From September 2013 through July 2015, LAKOU and his co-conspirators engaged in a scheme to defraud businesses and financial institutions by obtaining checks made out to legitimate businesses, opening fraudulent bank accounts in the names of the victim businesses, depositing the checks into the fraudulent accounts, and withdrawing funds from the fraudulent accounts. LAKOU and his co-conspirators carried out this scheme by, among other means, submitting false documentation in connection with bank account applications and forging the signatures of other actual persons.
From May 2014 through July 2015, LAKOU and his co-conspirators also engaged in a scheme to commit credit card fraud by using stolen credit card information to make fraudulent purchases of jewelry and other merchandise. LAKOU and his co-conspirators carried out this credit card fraud scheme by, among other means, fraudulently adding their own names as authorized users of preexisting victim credit cards and by submitting fraudulent applications for new credit card accounts in the names of their victims.
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LAKOU, 27, of Manhattan, pled guilty to one count of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; one count of conspiracy to commit access device fraud, which carries a maximum sentence of seven-and-a-half years in prison; one count of passport fraud, which carries a maximum sentence of 10 years in prison; and three counts of aggravated identity theft, each of which carries a mandatory sentence of two years in prison. The statutory maximum sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge. As part of his plea, LAKOU agreed to pay $557,894.50 in restitution to victims and to pay $557,894.50 in forfeiture. Lakou is scheduled to be sentenced at a future date by U.S. District Judge Victor Marrero.
Zoheb Qamran, 28, of Manhattan, and Jessica Hattar, 26, of Manhattan, have been separately charged in connection with the bank fraud and credit card fraud schemes. The charges against Qamran and Hattar are merely allegations, and they are presumed innocent unless and until they are proven guilty beyond a reasonable doubt.
Mr. Bharara praised the outstanding efforts of DOS-DDS in the investigation.
The case is being handled by the Office’s Money Laundering and Asset Forfeiture Unit. Assistant United States Attorney Jonathan Cohen is in charge of the prosecution.